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EX-31.2 - CERTIFICATION OF THE CHIEF FINANCIAL OFFICER - ALASKA GOLD CORP.exhibit31-2.htm
EX-32.1 - CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER - ALASKA GOLD CORP.exhibit32-1.htm
EX-31.1 - CERTIFICATION OF CHIEF EXECUTIVE OFFICER - ALASKA GOLD CORP.exhibit31-1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K/A
(Amendment No. 1)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended May 31, 2011

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________to ________________.

Commission file number 000-51583

SONO RESOURCES INC.
(Exact name of registrant as specified in its charter)

Nevada 98-0441019
(State or other jurisdiction of incorporation of organization) (I.R.S. Employer Identification No.)

2533 N. Carson Street, Suite 125, Carson City, Nevada 89706
(Address of Principal Executive Offices)

(775) 348-9330
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, Par Value $0.001
(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
[ ] Yes [X] No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.
[ ] Yes [X] No

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
[X] Yes [ ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.
[ ] Yes [ ] No

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

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Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] (do not check if a smaller reporting company) Smaller reporting company [X]

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]

The aggregate market value of the registrant’s stock held by non-affiliates of the registrant as of November 30, 2010, computed by reference to the price at which such stock was last sold on the OTC Bulletin Board ($0.50 per share) on that date, was approximately $12,263,326.

The registrant had 33,673,278 shares of common stock outstanding as of September 13, 2011.

__________

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TABLE OF CONTENTS

ITEM 1. BUSINESS 2
ITEM 1A. RISK FACTORS 6
ITEM 1B. UNRESOLVED STAFF COMMENTS 12
ITEM 2. PROPERTIES 12
ITEM 3. LEGAL PROCEEDINGS 20
ITEM 4. (REMOVED AND RESERVED) 21
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 21
ITEM 6. SELECTED FINANCIAL DATA 22
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 23
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 28
ITEM 8. FINANCIAL STATEMENTS 28
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 48
ITEM 9A. CONTROLS AND PROCEDURES 48
ITEM 9B. OTHER INFORMATION 48
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 49
ITEM 11. EXECUTIVE COMPENSATION 53
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 54
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE 55
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 55
ITEM 15. EXHIBITS 56

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EXPLANATORY NOTE

This amendment to our annual report on Form 10-K for our fiscal year ended May 31, 2011 is being filed in order to correct the disclosure about the acquisition of Bonnyridge (Pty) Ltd. (“Bonnyridge”) and to provide property disclosure about the mineral licenses that we acquired through our acquisition of Bonnyridge that completed on July 25, 2011, which we should have included in our original filing on Form 10-K for our fiscal year ended May 31, 2011, that was filed with the Securities and Exchange Commission on September 13, 2011.

This Form 10-K/A does not reflect events occurring after the filing of the original Form 10-K for our year ended May 31, 2011, or modify or update the disclosure therein in any way other than as required to reflect the amendments set forth herein.

FORWARD LOOKING STATEMENTS

This annual report contains forward-looking statements that involve risks and uncertainties. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology. In evaluating these statements, you should consider various factors, including the assumptions, risks and uncertainties outlined in this annual report under “Risk Factors”. These factors or any of them may cause our actual results to differ materially from any forward-looking statement made in this annual report. Forward-looking statements in this annual report include, among others, statements regarding:

  • our capital needs;

  • business plans; and

  • expectations.

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding future events, our actual results will likely vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Some of the risks and assumptions include:

  • our need for additional financing;

  • our limited operating history;

  • our history of operating losses;

  • our exploration activities may not result in commercially exploitable quantities of ore on our current or any future mineral properties;

  • the risks inherent in the exploration for minerals such as geologic formation, weather, accidents, equipment failures and governmental restrictions;

  • the competitive environment in which we operate;

  • changes in governmental regulation and administrative practices;

  • our dependence on key personnel;

  • conflicts of interest of our directors and officers;

  • our ability to fully implement our business plan;

  • our ability to effectively manage our growth; and

  • other regulatory, legislative and judicial developments.

We advise the reader that these cautionary remarks expressly qualify in their entirety all forward-looking statements attributable to us or persons acting on our behalf. Important factors that you should also consider, include, but are not limited to, the factors discussed under “Risk Factors” in this annual report.

The forward-looking statements in this annual report are made as of the date of this annual report and we do not intend or undertake to update any of the forward-looking statements to conform these statements to actual results, except as required by applicable law, including the securities laws of the United States.

AVAILABLE INFORMATION

Sono Resources Inc. files annual, quarterly and current reports, proxy statements, and other information with the Securities and Exchange Commission (the “Commission” or “SEC”). You may read and copy documents referred to in this Annual Report on Form 10-K that have been filed with the Commission at the Commission’s Public Reference Room, 100 F Street, N.E., Washington, D.C. You may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. You can also obtain copies of our Commission filings by going to the Commission’s website at http://www.sec.gov.

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REFERENCES

As used in this annual report: (i) the terms “we”, “us”, “our”, “Sono” and the “Company” mean Sono Resources Inc.; (ii) “SEC” refers to the Securities and Exchange Commission; (iii) “Securities Act” refers to the United States Securities Act of 1933, as amended; (iv) “Exchange Act” refers to the United States Securities Exchange Act of 1934, as amended; and (v) all dollar amounts refer to United States dollars unless otherwise indicated.

PART I

ITEM 1. BUSINESS

Name, Incorporation and Principal Offices

We were incorporated under the laws of the State of Nevada on April 5, 2004 under the name “Revelstoke Industries, Inc.” for the purpose of reclaiming and stabilizing land in preparation for construction in Canada. Effective November 27, 2006, we changed our name to “Geneva Gold Corp.” Subsequently, effective March 1, 2007, we changed our name to “Geneva Resources, Inc.”. On February 10, 2011 we merged with our wholly-owned subsidiary, Sono Resources, Inc., pursuant to Articles of Merger that the Company filed with the Nevada Secretary of State. This merger became effective March 11, 2011 and we changed our name to Sono Resources, Inc. We are an exploration stage enterprise, as defined in FASB ASC 915 “Development Stage Entities.”

Our principal offices are located at Suite 125, 2533 N. Carson Street, Carson City, Nevada 89706; our telephone number is (775) 348-9330.

Overview

We are currently engaged in the business of exploration of precious metals with a focus on the exploration and development of gold deposits in North America and internationally. As of the date of this Annual Report, our mineral interests consist mainly of option agreements on exploration stage properties as discussed below. We have not established any proven or probable reserves on our mineral property interests.

Mineral Properties

Vilcoro Gold Property

On February 23, 2007, we entered into a Property Option Agreement with St. Elias Mines Ltd., (“St. Elias”) a publicly traded company on the TSX-V exchange, to acquire not less than an undivided 66% legal, beneficial and registerable interest in certain mining leases in Peru comprised of approximately 600 hectares in Peru.

On December 1, 2007, we entered into an extension agreement with St. Elias (the “December Extension Agreement”). The December Extension Agreement (i) acknowledged that in accordance with the terms and provisions of the Property Option Agreement, we must incur and pay exploration expenditures of not less than $500,000 prior to January 17, 2008, and (ii) provided an extension until March 31, 2008 to incur and pay such Exploration Expenditures. On June 4, 2008, an indefinite extension was granted by St. Elias to pay such Exploration Expenditures, based on the Operator’s work on schedule.

Under the terms of the Property Option Agreement, and in order to exercise its Option to acquire the properties, we were required to make the following non-refundable cash payments to St. Elias totaling $350,000 in the following manner:

  1.

Payment of $50,000 in cash (paid).

  2.

The second payment of $100,000 in cash and issuance of 12,500 shares of the Company’s common stock were due on or before the twelve month anniversary of the signing of the Property Option Agreement (paid and issued).

  3.

The third payment of $200,000 in cash was due on or before the twenty fourth month anniversary of the signing of the Property Option Agreement.

We were also required to incur costs totaling $2,500,000 as follows:

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  1.

expenditures of $500,000 were to be incurred on or before the twelve month anniversary (subsequently indefinitely extended as described above) of the signing of the Property Option Agreement. ($551,000 was incurred from the inception of the agreement through May 31, 2009;

  2.

expenditures of $750,000 were to be incurred on or before the twenty-fourth-month anniversary (subsequently indefinitely extended as described above) of the signing of the Property Option Agreement; and

  3.

expenditures of $1,250,000 were to be incurred on or before the thirty-sixth-month anniversary (subsequently indefinitely extended as described above) of the signing of the Property Option Agreement.

Also under the terms of the Property Option Agreement, St. Elias would be the operator of the properties and would receive an 8% operator fee on all exploration expenditures. Once we exercised the Option defined above, we agreed to pay 100% of all ongoing exploration, development and production costs until commercial production and we had the right to receive 100% of any cash flow from commercial production of the properties until we had recouped our production costs, after which the cash flow would be allocated 66% to us and 34% to St. Elias.

On November 10, 2008, we commenced legal proceedings in the Supreme Court of British Columbia, Canada against each of St. Elias and John Brophy, P. Geol. We sought rescission of the Property Option Agreement and the return of all funds and shares advanced by us to St. Elias. We alleged that St. Elias failed to properly discharge its duty as an operator of the Vilcoro Property and also alleged that each of St. Elias and Mr. Brophy failed to provide us with complete and accurate information relating to the ownership of the Vilcoro Property and to the ownership of the adjacent property, including failing to disclose that Mr. Brophy and his wife had an interest in the Vilcoro Property and the adjacent property. We also alleged that St. Elias used some of the exploration funds provided by us to fund the exploration of the adjoining property.

A statement of Defense was filed by St. Elias and Mr. Brophy on December 23, 2008, denying the majority of the allegations made by us. In addition St. Elias and John Brophy also filed a counterclaim against us for abuse of process and punitive damages.

On May 5, 2010, we entered into a mutual release with St. Elias pursuant to which St. Elias and we agreed to release one another from all causes of action, claims and demands of any nature of kind whatsoever arising out of or in any way related to any of the subject matter of the Statement of Claim. As part of the mutual release St. Elias agreed to return to us the 12,500 shares of common stock that we previously issued to St. Elias. On July 12, 2010, the 12,500 shares were returned to treasury and cancelled.

Amelia and San Martin

As of November 30, 2009, we entered into a letter agreement (the “Letter Agreement”) with Glenn Patrick Schmitz (the “Optionor”), in connection with the proposed acquisition of an 80% interest in thirty-nine mineral concessions located near Domyeko in Chile. In accordance with the terms and provisions of the Letter Agreement: (i) we paid the Optionor $5,000 upon execution of the Letter Agreement; (ii) we were to issue to the Optionor an aggregate of 2,000,000 shares of our restricted common stock as follows: (a) 500,000 shares as the initial tranche within thirty days of execution of a formal and definitive agreement (the “Formal Agreement”), (b) 1,000,000 shares upon the expiration of the first twelve month period after execution of the Formal Agreement, and (c) 500,000 shares upon the expiration of the second twelve month period after execution of the Formal Agreement; (iii) we were to pay the Optionor further amounts as follows: (a) $300,000 prior to the expiration of the first twelve month period after execution of the Formal Agreement, (b) an amount to be paid by us as exploration expenditures prior to expiration of the second twelve month period after execution of the Formal Agreement, which amount was to be solely and exclusively determined by us based on the first year term drilling and exploration results, and (c) an amount to be paid by us as exploration expenditures prior to expiration of the third twelve month period after execution of the Formal Agreement, which amount was to be solely and exclusively determined by us based on the second year term drilling and exploration results.

Upon completion of due diligence, we decided not to proceed with this proposed acquisition and made a request for the return of the $5,000. As of May 31, 2010, the $5,000 was written off to mineral property expenditures based on uncertainty as to collection.

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Botswana Share Purchase Agreement

During the year ended May 31, 2011, we entered into a formal Share Purchase Agreement, as amended, (the “Share Purchase Agreement”) with Tignish (PTY) Ltd., a Botswana company (the “Vendor”), to purchase 95 percent of the issued and outstanding shares of Bonnyridge (PTY) Ltd., also a Botswana company (“Bonnyridge”), which is the legal and beneficial owner of three mineral license blocks located in Northwestern Botswana, Africa (the “Property”).

Effective July 25, 2011, we completed the acquisition from Tignish of 950 common shares of Bonnyridge (the “Purchased Shares”), representing 95% of the issued and outstanding shares of Bonnyridge. Pursuant to the Share Purchase Agreement, Tignish has sold, and the Company has purchased, the Purchased Shares for the following consideration: (i) an initial cash payment of US$200,000 (paid April 20, 2011); (ii) a further cash payment of US$100,000 (paid July 29, 2011); and (iii) 6,500,000 restricted common shares of the Company (issued July 31, 2011). In order to maintain its Property interests, Bonnyridge continued to be obligated to provide the Vendor with USD$900,000 payable in three instalments of USD$300,000 per year over a three-year period ($300,000 of which was covered by the two cash payments described above).

Effective on August 11, 2011, we entered into an agreement in principle to acquire the remaining 5% of the shares of Bonnyridge Pty to hold 100% of the shares. Sono has now acquired the remaining 5% Shares by paying $100,000 in cash (paid September 7, 2011) and issuing 1,000,000 additional shares from treasury (issued August 30, 2011); thereby also eliminating the additional cash payments of $600,000, which had been required under the Share Purchase Agreement described above.

Proposed Future Business Operations

Our current strategy is to complete further acquisitions of other mineral property opportunities which fall within the criteria of providing a geological basis for development of mining initiatives that can provide near term revenue potential and production cash flows to create expanding reserves. We anticipate that our ongoing efforts, subject to adequate funding being available, will continue to be focused on successfully concluding negotiations for additional interests in mineral properties. We plan to build a strategic base of producing mineral properties.

Our ability to continue to complete planned exploration activities and expand acquisitions and explore mining opportunities is dependent on adequate capital resources being available and further sources of debt and equity being obtained.

Development of Mineral Properties

The requirement to raise further funding for mineral exploration and development for the next twelve months and beyond may be dependent on the outcome of geological and engineering testing occurring over this interval on potential properties. If future results provide the basis to continue development and geological studies indicate high probabilities of sufficient mineral production quantities, we will attempt to raise capital to further our programs, build production infrastructure, and raise additional capital for further acquisitions. This includes the following activity:

  • Target further leases for exploration potential and obtain further funding to acquire new development targets.

  • Review all available information and studies.

  • Digitize all available factual information.

  • Completion of a NI 43-101 Compliant Report with a qualified geologist familiar with mineralization in the respective area.

  • Determine feasibility and amenability of extracting the minerals.

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  • Create investor communications materials, corporate identity.

  • Raise funding for mineral development.

Competition

We operate in a highly competitive industry, competing with other mining and exploration companies, and institutional and individual investors, which are actively seeking metal and mineral based exploration properties throughout the world together with the equipment, labour and materials required to exploit such properties. Many of our competitors have financial resources, staff and facilities substantially greater than ours. The principal area of competition is encountered in the financial ability to cost effectively acquire prime metal and minerals exploration prospects and then exploit such prospects. Competition for the acquisition of metal and minerals exploration properties is intense, with many properties available in a competitive bidding process in which we may lack technological information or expertise available to other bidders. Therefore, we may not be successful in acquiring and developing profitable properties in the face of this competition. No assurance can be given that a sufficient number of suitable metal and minerals exploration properties will be available for acquisition and development.

Minerals Exploration Regulation

Our minerals exploration activities are, or will be, subject to extensive foreign laws and regulations governing prospecting, development, production, exports, taxes, labor standards, occupational health, waste disposal, protection and remediation of the environment, protection of endangered and protected species, mine safety, toxic substances and other matters. Minerals exploration is also subject to risks and liabilities associated with pollution of the environment and disposal of waste products occurring as a result of mineral exploration and production. Compliance with these laws and regulations may impose substantial costs on us and will subject us to significant potential liabilities. Changes in these regulations could require us to expend significant resources to comply with new laws or regulations or changes to current requirements and could have a material adverse effect on our business operations.

Exploration and production activities are subject to certain environmental regulations which may prevent or delay the commencement or continuance of our operations. In general, our exploration and production activities are subject to certain foreign regulations and may be subject to federal, state and local laws and regulations relating to environmental quality and pollution control. Such laws and regulations increase the costs of these activities and may prevent or delay the commencement or continuance of a given operation. Compliance with these laws and regulations does not appear to have a future material effect on our operations or financial condition to date. Specifically, we may be subject to legislation regarding emissions into the environment, water discharges and storage and disposition of hazardous wastes. However, such laws and regulations, whether foreign or local, are frequently changed and we are unable to predict the ultimate cost of compliance. Generally, environmental requirements do not appear to affect us any differently or to any greater or lesser extent than other companies in the industry and our current operations have not expanded to a point where either compliance or cost of compliance with environmental regulation is a significant issue for us. Costs have not been incurred to date with respect to compliance with environmental laws but such costs may be expected to increase with an increase in scale and scope of exploration.

Minerals exploration operations are subject to comprehensive regulation which may cause substantial delays or require capital outlays in excess of those anticipated causing an adverse effect on our business operations. Minerals exploration operations are subject to foreign, federal, state, and local laws relating to the protection of the environment, including laws regulating removal of natural resources from the ground and the discharge of materials into the environment. Minerals exploration operations are also subject to federal, state, and local laws and regulations which seek to maintain health and safety standards by regulating the design and use of drilling methods and equipment. Various permits from government bodies are required for drilling operations to be conducted; no assurance can be given that such permits will be received. Environmental standards imposed by federal, state, or local authorities may be changed and any such changes may have material adverse effects on our activities. Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on us. Additionally, we may be subject to liability for pollution or other environmental damages which we may elect not to insure against due to prohibitive premium costs and other reasons. As of the date of this Annual Report, we have not been required to spend any material amount on compliance with environmental regulations. However, we may be required to do so in the future and this may affect our ability to expand or maintain our operations.

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Research and Development Activities

No research and development expenditures have been incurred, either on our account or sponsored by customers, during the past three years.

Employees

We do not employ any persons on a full-time or on a part-time basis. Peter Wilson is our President/Chief Executive Officer and William D. Thomas is our Treasurer/Chief Financial Officer. These individuals are primarily responsible for all our day-to-day operations. Other services are provided by outsourcing, consultant, and special purpose contracts.

Subsidiaries

The Company does not have any subsidiaries.

Patents and Trademarks

We do not own, either legally or beneficially, any patent or trademark.

ITEM 1A. RISK FACTORS

An investment in our common stock involves a number of very significant risks. You should carefully consider the following risks and uncertainties in addition to other information in this annual report in evaluating our company and its business before purchasing shares of our common stock. Our business, operating results and financial condition could be seriously harmed due to any of the following risks. The risks described below may not be all of the risks facing our company. Additional risks not presently known to us or that we currently consider immaterial may also impair our business operations. You could lose all or part of your investment due to any of these risks.

Risks Related to Our Business

We will need to raise additional financing to complete exploration on our properties.

We will require significant additional financing in order to continue our exploration activities. Furthermore, if the costs of any planned exploration programs are greater than anticipated, we may have to seek additional funds through public or private share offerings or arrangements with corporate partners. There can be no assurance that we will be successful in our efforts to raise these required funds, or on terms satisfactory to us. The continued exploration of current and future mineral properties and the development of our business will depend upon our ability to establish the commercial viability of our precious metal and mineral properties and to ultimately develop cash flow from operations and reach profitable operations.

We currently are in the exploration stage and we have no revenue from operations and we are experiencing significant negative cash flow. Accordingly, the only other sources of funds presently available to us are through the sale of equity. We presently believe that debt financing will not be an alternative to us. Alternatively, we may finance our business by offering an interest in any of our mineral properties to be earned by another party or parties carrying out further exploration and development thereof or to obtain project or operating financing from financial institutions, neither of which is presently intended. If we are unable to obtain this additional financing, we will not be able to continue our exploration activities and our assessment of the commercial viability of our precious metal and mineral properties. Further, if we are able to establish that development of our current or future precious metal and mineral properties is commercially viable, our inability to raise additional financing at this stage would result in our inability to place our mineral properties into production and recover our investment. We may not discover commercially exploitable quantities of precious metals or minerals on our current or future properties that would enable us to enter into commercial production, and achieve revenues and recover the money we spend on exploration.

Our mineral properties do not contain reserves in accordance with the definitions adopted by the Securities and Exchange Commission, and there is no assurance that any exploration programs that we carry out will establish reserves. We plan to conduct exploration activities on our mineral properties, which exploration may include the completion of feasibility studies necessary to evaluate whether a commercial mineable mineral exists on any of our properties. There is a substantial risk that these exploration activities will not result in discoveries of commercially recoverable quantities of minerals. Any determination that our properties contain commercially recoverable quantities of minerals may not be reached until such time that final comprehensive feasibility studies have been concluded that establish that a potential mine is likely to be economic. There is a substantial risk that any preliminary or final feasibility studies carried out by us will not result in a positive determination that our mineral properties can be commercially developed.

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Our exploration activities on our mineral properties may not be commercially successful, which could lead us to abandon our plans to develop the property and our investments in exploration.

Our long-term success depends on our ability to establish commercially recoverable quantities of ore on our mineral properties that can then be developed into commercially viable mining operations. Mineral exploration is highly speculative in nature, involves many risks and is frequently non-productive. These risks include unusual or unexpected geologic formations, and the inability to obtain suitable or adequate machinery, equipment or labor. The success of mineral exploration is determined in part by the following factors:

  • identification of potential mineralization based on superficial analysis;

  • availability of government-granted exploration permits;

  • the quality of management and geological and technical expertise; and

  • the capital available for exploration.

Substantial expenditures are required to establish proven and probable reserves through drilling and analysis, to develop processes to extract minerals, and to develop the mining and processing facilities and infrastructure at any chosen site. Whether a mineral deposit will be commercially viable depends on a number of factors, which include, without limitation, the particular attributes of the deposit, such as size, grade and proximity to infrastructure; metal prices, which fluctuate widely; and government regulations, including, without limitation, regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. We may invest significant capital and resources in exploration activities and abandon such investments if we are unable to identify commercially exploitable mineral reserves. The decision to abandon a project may reduce the trading price of our common stock and impair our ability to raise future financing. We cannot provide any assurance to investors that we will discover or acquire any mineralized material in sufficient quantities on any of our properties to justify commercial operations. Further, we will not be able to recover the funds that we spend on exploration if we are not able to establish commercially recoverable quantities of precious metals or minerals on our properties.

Our business is difficult to evaluate because we have a limited operating history.

In considering whether to invest in our common stock, you should consider that our inception was April 5, 2004 and, as a result, there is only limited historical financial and operating information available on which to base your evaluation of our performance. In addition, we only recently acquired the primary minerals exploration prospects and have limited experience in early stage exploration efforts.

We have a history of operating losses and there can be no assurances we will be profitable in the future.

We have a history of operating losses, expect to continue to incur losses, and may never be profitable, and we must be considered to be in the exploration stage. Further, we have been dependent on sales of our equity securities and debt financing to meet our cash requirements. We have incurred net losses totaling approximately $8,489,180 from inception (April 5, 2004) to May 31, 2011. As of May 31, 2011, we had an accumulated deficit of $8,489,180 and incurred net losses of approximately $330,570 during fiscal year ended May 31, 2011. Further, we do not expect positive cash flow from operations in the near term. There is no assurance that actual cash requirements will not exceed our estimates. In particular, additional capital may be required in the event that: (i) the costs to acquire additional mineral exploration claims are more than we currently anticipate; (ii) exploration and or future potential mining costs for additional claims increase beyond our expectations; or (iii) we encounter greater costs associated with general and administrative expenses or offering costs.

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Future participation in an increased number of minerals exploration prospects will require substantial capital expenditures.

The uncertainty and factors described throughout this section may impede our ability to economically discover, acquire, develop and/or exploit mineral prospects. As a result, we may not be able to achieve or sustain profitability or positive cash flows from operating activities in the future.

The financial statements for the fiscal year ended May 31, 2011 and May 31, 2010 have been prepared assuming that the Company will continue as a going concern, which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business. Our ability to continue as a going concern is dependent on raising additional capital to fund our operations and ultimately on generating future profitable operations. There can be no assurance that we will be able to raise sufficient additional capital or eventually have positive cash flow from operations to address all of our cash flow needs. If we are not able to find alternative sources of cash or generate positive cash flow from operations, our business and shareholders will be materially and adversely affected.

We will require additional funding in the future.

Based upon our historical losses from operations, we will require additional funding in the future. If we cannot obtain capital through financings or otherwise, our ability to execute our exploration programs will be greatly limited. Our current plans require us to make capital expenditures for the exploration of our minerals exploration properties. Historically, we have funded our operations through the issuance of equity and short-term debt financing arrangements. We may not be able to obtain additional financing on favorable terms, if at all. Our future cash flows and the availability of financing will be subject to a number of variables, including potential production and the market prices of certain minerals. Further, debt financing could lead to a diversion of cash flow to satisfy debt-servicing obligations and create restrictions on business operations. If we are unable to raise additional funds, it would have a material adverse effect upon our operations.

As part of our growth strategy, we intend to acquire additional precious metals and minerals exploration properties.

Such acquisitions may pose substantial risks to our business, financial condition, and results of operations. In pursuing acquisitions, we will compete with other companies, many of which have greater financial and other resources to acquire attractive properties. Even if we are successful in acquiring additional properties, some of the properties may not produce positive results of exploration, or we may not complete exploration of such prospects within specified time periods which may cause the forfeiture of the lease in that prospect. There can be no assurance that we will be able to successfully integrate acquired properties, which could result in substantial costs and delays or other operational, technical, or financial problems. Further, acquisitions could disrupt ongoing business operations. If any of these events occur, it would have a material adverse effect upon our operations and results from operations.

We are relatively a new entrant into the precious metals and minerals exploration and development industry without profitable operating history.

Since inception, our activities have been limited to organizational efforts, obtaining working capital and acquiring a very limited number of properties. As a result, there is limited information regarding production or revenue generation. As a result, our future revenues may be limited. The business of minerals exploration and development is subject to many risks and if gold or other precious metals or other minerals are found in economic production quantities, the potential profitability of future possible mining ventures depends upon factors beyond our control. The potential profitability of mining mineral properties if economic quantities of minerals are found is dependent upon many factors and risks beyond our control, including, but not limited to: (i) unanticipated ground and water conditions and adverse claims to water rights; (ii) geological problems; (iii) metallurgical and other processing problems; (iv) the occurrence of unusual weather or operating conditions and other force majeure events; (v) lower than expected grades of minerals; (vi) accidents; (vii) delays in the receipt of or failure to receive necessary government permits; (viii) delays in transportation; (ix) labor disputes; (x) government permit restrictions and regulation restrictions; (xi) unavailability of materials and equipment; and (xii) the failure of equipment or processes to operate in accordance with specifications or expectations.

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The risks associated with exploration and development and, if applicable, mining could cause personal injury or death, environmental damage, delays in mining, monetary losses and possible legal liability.

We are not currently engaged in mining operations because we are in the exploration phase and have not yet proved any minerals reserves. We do not presently carry property and liability insurance. Cost effective insurance contains exclusions and limitations on coverage and may be unavailable in some circumstances.

The mineral exploration and mining industry is highly competitive and there is no assurance that we will be successful in acquiring the leases.

The mineral exploration and mining industry is intensely competitive, and we compete with other companies that have greater resources. Many of these companies not only explore for and produce certain minerals, but also market certain minerals and other products on a regional, national or worldwide basis. These companies may be able to pay more for productive mineral properties and exploratory prospects or define, evaluate, bid for and purchase a greater number of properties and prospects than our financial or human resources permit. In addition, these companies may have a greater ability to continue exploration activities during periods of low mineral market prices. Our larger competitors may be able to absorb the burden of present and future foreign, federal, state, local and other laws and regulations more easily than we can, which would adversely affect our competitive position. Our ability to acquire additional properties and to discover productive prospects in the future will be dependent upon our ability to evaluate and select suitable properties and to consummate transactions in a highly competitive environment. In addition, because we have fewer financial and human resources than many companies in our industry, we may be at a disadvantage in bidding for exploratory prospects and producing mineral properties.

The marketability of natural resources will be affected by numerous factors beyond our control which may result in us not receiving an adequate return on invested capital to be profitable or viable.

The marketability of natural resources which may be acquired or discovered by us will be affected by numerous factors beyond our control. These factors include macroeconomic factors, market fluctuations in commodity pricing and demand, the proximity and capacity of natural resource markets and processing equipment, governmental regulations, land tenure, land use, regulation concerning the importing and exporting of certain minerals and environmental protection regulations. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in us not receiving an adequate return on invested capital to be profitable or viable.

Mineral mining operations are subject to comprehensive regulation, which may cause substantial delays or require capital outlays in excess of those anticipated, causing an adverse effect on our business operations.

If economic quantities of certain minerals are found on any lease owned by us in sufficient quantities to warrant mining operations, such mining operations are subject to foreign, federal, state, and local laws relating to the protection of the environment, including laws regulating removal of natural resources from the ground and the discharge of materials into the environment. Mineral mining operations are also subject to foreign, federal, state, and local laws and regulations which seek to maintain health and safety standards by regulating the design and use of mining methods and equipment. Various permits from government bodies are required for mining operations to be conducted; no assurance can be given that such permits will be received. Environmental standards imposed by federal, provincial, or local authorities may be changed and any such changes may have material adverse effects on our activities. Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus resulting in an adverse effect on us. Additionally, we may be subject to liability for pollution or other environmental damages which we may elect not to insure against due to prohibitive premium costs and other reasons. To date we have not been required to spend material amounts on compliance with environmental regulations. However, we may be required to do so in future and this may affect our ability to expand or maintain our operations.

Minerals exploration and development and mining activities are subject to certain environmental regulations, which may prevent or delay the commencement or continuance of our operations.

Minerals exploration and development and potential mining operations are or will be subject to stringent federal, state, provincial, and local laws and regulations relating to improving or maintaining environmental quality. Our global operations are also subject to many environmental protection laws. Environmental laws often require parties to pay for remedial action or to pay damages regardless of fault. Environmental laws also often impose liability with respect to divested or terminated operations, even if the operations were terminated or divested of many years ago.

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Future potential mineral mining operations and current exploration activities are or will be subject to extensive laws and regulations governing prospecting, development, production, exports, taxes, labor standards, occupational health, waste disposal, protection and remediation of the environment, protection of endangered and protected species, mine safety, toxic substances and other matters. Mineral mining is also subject to risks and liabilities associated with pollution of the environment and disposal of waste products occurring as a result of mineral exploration and production. Compliance with these laws and regulations will impose substantial costs on us and will subject us to significant potential liabilities.

Costs associated with environmental liabilities and compliance may increase with an increase in future scale and scope of operations.

We believe that our prior and future operations will comply, in all material respects, with all applicable environmental regulations. However, we are not fully insured at the current date against possible environmental risks.

Any change in government regulation/administrative practices may have a negative impact on our ability to operate and our profitability.

The laws, regulations, policies or current administrative practices of any government body, organization or regulatory agency may be changed, applied or interpreted in a manner which will fundamentally alter our ability to carry on business. The actions, policies or regulations, or changes thereto, of any government body or regulatory agency, or other special interest groups, may have a detrimental effect on us. Any or all of these situations may have a negative impact on our ability to operate and/or our profitability.

We may be unable to retain key employees or consultants or recruit additional qualified personnel.

Our extremely limited personnel means that we would be required to spend significant sums of money to locate and train new employees in the event any of our employees resign or terminate their employment with us for any reason. Due to our limited operating history and financial resources, we are entirely dependent on the continued service of Peter Wilson, our President/Chief Executive Officer and William D. Thomas, our Treasurer/Chief Financial Officer and a director. Further, we do not have key man life insurance on this individual. We may not have the financial resources to hire a replacement if any of our officers were to die. The loss of service could therefore significantly and adversely affect our operations.

Our officers and directors may be subject to conflicts of interest.

Our officers and directors serve only part time and are subject to conflicts of interest. Each of our executive officers and directors serves only on a part time basis. Each devotes part of his working time to other business endeavors, including consulting relationships with other corporate entities, and has responsibilities to these other entities. Such conflicts include deciding how much time to devote to our affairs, as well as what business opportunities should be presented to us. Because of these relationships, our officers and directors may be subject to conflicts of interest.

Nevada law and our articles of incorporation may protect our directors from certain types of lawsuits.

Nevada law provides that our officers and directors will not be liable to us or our stockholders for monetary damages for all but certain types of conduct as officers and directors. Our Bylaws permit us broad indemnification powers to all persons against all damages incurred in connection with our business to the fullest extent provided or allowed by law. The exculpation provisions may have the effect of preventing stockholders from recovering damages against our officers and directors caused by their negligence, poor judgment or other circumstances. The indemnification provisions may require us to use our limited assets to defend our officers and directors against claims, including claims arising out of their negligence, poor judgment, or other circumstances.

Risks Related to Our Common Stock

Sales of a substantial number of shares of our common stock into the public market by certain stockholders may result in significant downward pressure on the price of our common stock and could affect your ability to realize the current trading price of our common stock.

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The trading price of our common stock on the OTC Bulletin Board has been and may continue to fluctuate significantly and stockholders may have difficulty reselling their shares.

Our common stock commenced trading on approximately December 1, 2006 on the OTC Bulletin Board and the trading price has fluctuated. In addition to volatility associated with Bulletin Board securities in general, the value of your investment could decline due to the impact of any of the following factors upon the market price of our common stock: (i) disappointing results from our discovery or development efforts; (ii) failure to meet our revenue or profit goals or operating budget; (iii) decline in demand for our common stock; (iv) downward revisions in securities analysts’ estimates or changes in general market conditions; (v) technological innovations by competitors or in competing technologies; (vi) lack of funding generated for operations; (vii) investor perception of our industry or our prospects; and (viii) general economic trends.

In addition, stock markets have experienced price and volume fluctuations and the market prices of securities have been highly volatile. These fluctuations are often unrelated to operating performance and may adversely affect the market price of our common stock. As a result, investors may be unable to sell their shares at a fair price and you may lose all or part of your investment.

Additional issuances of equity securities may result in dilution to our existing stockholders.

Our Articles of Incorporation authorize the issuance of 50,000,000 shares of common stock. The Board of Directors has the authority to issue additional shares of our capital stock to provide additional financing in the future and the issuance of any such shares may result in a reduction of the book value or market price of the outstanding shares of our common stock. If we do issue any such additional shares, such issuance also will cause a reduction in the proportionate ownership and voting power of all other stockholders. As a result of such dilution, if you acquire shares of our common stock, your proportionate ownership interest and voting power could be decreased. Further, any such issuances could result in a change of control.

Our common stock is classified as a “penny stock” under SEC rules which limits the market for our common stock.

Because our stock is not traded on a stock exchange or on the NASDAQ National Market or the NASDAQ Small Cap Market, and because the market price of the common stock has fluctuated and may trade at times at less than $5 per share, the common stock may be classified as a “penny stock.” SEC Rule 15g-9 under the Exchange Act imposes additional sales practice requirements on broker-dealers that recommend the purchase or sale of penny stocks to persons other than those who qualify as an “established customer” or an “accredited investor.” This includes the requirement that a broker-dealer must make a determination that investments in penny stocks are suitable for the customer and must make special disclosures to the customers concerning the risk of penny stocks. Many broker-dealers decline to participate in penny stock transactions because of the extra requirements imposed on penny stock transactions. Application of the penny stock rules to our common stock reduces the market liquidity of our shares, which in turn affects the ability of holders of our common stock to resell the shares they purchase, and they may not be able to resell at prices at or above the prices they paid.

A decline in the price of our common stock could affect our ability to raise further working capital and adversely impact our operations.

A decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise additional capital for our operations. Since our operations to date have been principally financed through the sale of equity securities, a decline in the price of our common stock could have an adverse effect upon our liquidity and our continued operations. A reduction in our ability to raise equity capital in the future would have a material adverse effect upon our business plan and operations, including our ability to continue our current operations. If our stock price declines, we may not be able to raise additional capital or generate funds from operations sufficient to meet our obligations.

Certain of our directors and officers are outside the United States with the result that it may be difficult for investors to enforce within the United States any judgments obtained against certain of our directors or officers.

Certain of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons’ assets are located outside the United States. As a result, it may be difficult for investors to effect service of process on our directors or officers, or enforce within the United States or Canada any judgments obtained against us or our officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. Consequently, you may be effectively prevented from pursuing remedies under U.S. federal securities laws against them. In addition, investors may not be able to commence an action in a Canadian court predicated upon the civil liability provisions of the securities laws of the United States.

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ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable as we are not an accelerated or large accelerated filer.

ITEM 2. PROPERTIES

Our executive offices are located at Suite 125-2533 N. Carson Street, Carson City, Nevada 89706.

Bonnyridge Licenses (the “Sono Project” or “Sono Property”)

Description and Location

The Sono Project is located within the Ghanzi and Ngamiland Districts of northwest Botswana. The centre of the Sono Project is 240 kilometres (km) west-south-west of the town of Maun and 90 km north-north-west of the town of Ghanzi. The geographic centre of the Sono Property is at Latitude 20°56’00” South and Longitude 21°18’00” East, which lies in Southern Zone 34 of the Universal Transverse Mercator (UTM) projection using the WGS84 datum (Figure 1).


Figure 1. Sono Property Location Map

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Land Tenure

The Sono Project consists of three (3) contiguous prospecting license blocks (PL700/2009, PL701/2009 and PL702/2009). The prospecting licence boundaries have not been surveyed. The license status is shown in Table 1. The Company does not own the surface rights to the prospecting licences and as such the Company must negotiate with the surface right owners for access to their respective properties in order to carry out mineral exploration programmes.

Table 1. List of the Bonnyridge prospecting licenses and relevant information.

Map
#

PL ID

Issue date

Expiry date
Area
(km2 )

Status

Metals

Company
1 PL700/2009 2009/10/01 2012/09/30 983.0 original base and precious BON
2 PL701/2009 2009/10/01 2012/09/30 992.2 original base and precious BON
3 PL702/2009 2009/10/01 2012/09/30 990.4 original base and precious BON

BON: Bonnyridge (Pty) Ltd

Botswana Minerals and Environmental Policy

The minerals industry is administered by the Minister of Minerals, Energy and Water resources (“MMEWR”) and is regulated by the Botswana Mines and Minerals Act of 1999 (the “Act”). The Act, which repealed the previous Mining Rights Act of 1976, was revised to reflect the changed policies of mineral development and disposition in the country. It seeks to address the shortcomings of the 1976 Act by streamlining it to encourage investment. Furthermore, ministerial discretion has been discarded in favour of more transparent procedures for obtaining and transferring mining properties; taxes and royalties have been revised, and environmental policies have been included in the legislation for the first time (Mining Journal, 1999).

The Prospecting License, Mining License, and Mineral Permit rights stipulated in the Act are summarized in Table 2 below. A Prospecting License may be transferred to any other person provided that the Minister is notified within 30 days before the intended transfer, upon which the transferee will assume and be responsible for all rights, liabilities and duties of the transferor under the Prospecting Licence.

Table 2. Prospecting Licence Rights

Type
of Right

Validity

Renewal Period

Size of Area

Rights

Obligations
Prospecting License
Maximum of 3 years Maximum of 2 years (and 2 renewals); after the original granting, the surface area is reduced by 50% Maximum of 1000 km2 • to prospect thereon for the mineral to which his prospecting licence relates
• drill boreholes and make such excavations as may be necessary
• erect camps and put up temporary buildings for machinery necessary for prospecting purposes
• to transfer, with government approval
• carry out prospecting according to a works programme
• notify Minister of the discovery of all minerals
• annually submit an audited report on expenditure to the Director of Geological Survey
• keep full and accurate records of prospecting operations, to be submitted on a quarterly basis
Mining License Maximum of 25 years Unlimited renewal periods, not exceeding 25 years Not specified • to mine the mineral to which the mining licence relates
• erect the necessary equipment, plant and buildings • dispose of any mineral product recovered;
• prospect within the mining area
• dispose any mineral or waste product in a manner approved by the Director of Mines
• to transfer, with government approval
• Must carry out mining according to the programme of works and in accordance with good mining and environmental practice
• notify the Minister as soon as mining becomes profitable
• keep (in Botswana) all technical and financial records and submit to Minister when, and if, required
• furnish the Minister with a copy of annual audited financial statements within six months of the end of each financial year
• Upon the issue of a mining licence, the Government shall have the option of acquiring up to 15% working interest participation in the proposed mine

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A new type of mineral concession, the retention license (RL), has been recently introduced. The RL allows an investor that has completed an exploration programme and confirmed the discovery of a mineral deposit to retain rights over it for renewable periods, should prevailing market conditions make immediate exploitation of the deposit un-economic. According to the Act (1999), a retention license is valid for a maximum period of three years and is renewable only once at any time not later than three months before the expiry date.

Mining Rights in Botswana

The holders of mineral rights must compensate surface owners for the use and any possible damage to their properties as a result of the mining activities. The environmental policies outlined in the new Act are lacking in detail and it is suggested that the country adopts an all inclusive explicit and comprehensive environmental protection act that covers all environmental issues as a matter of urgency (Matshediso, 2005); however, the government clearly expects the mining industry to carry out its activities in an environmentally responsible manner and the Act stipulates the following obligations (in summary):

  1.

Preserve the natural environment;

     
  2.

Submit a comprehensive Environmental Impact Assessment as part of the Project Feasibility Study Report prior to commencement of mining operations;

     
  3.

Prevent and where not avoidable, promptly treat pollution and contamination of the environment;

     
  4.

Restore the land substantially to the condition in which it was prior to the commencement of operations; and,

     
  5.

Make ongoing financial provision for compliance with the (environmental) obligations.

According to the Mines and Minerals Act (1999), a royalty is payable to the government of 10% for precious stones, 5% for precious metals, and 3% for other minerals. The percentage is based upon the gross sale value receivable at the mine gate.

Accessibility

The Sono Property area is situated within the Kalahari Desert, between the towns of Maun to the north and Ghanzi to the south. Maun provides the main entry for tourism to the Okavanga Delta—the largest inland delta in the world which is located some 60km to the north of the Sono Property (see Figure 1).

The Sono Property is accessed via the paved Trans Kalahari Highway (“TKHor Botswana A3 highway) that is located within 15 to 40 km to the east of the Sono Property and then by a network of unpaved farm roads. Small-engine fixed-wing aircraft access is available on some of the nearby farms. Travel time, by road from Maun to the northern most section of the Sono Property is approximately three (3) hours. The Sono Property is accessible year round.

Maun is serviced by an international airport with several regularly scheduled flights from Gaborone, the capital of Botswana, Johannesburg, South Africa and Windhoek, Namibia.

The Kuke Veterinary Fence (Kuke Fence), erected to prevent the spread of cattle diseases, transects the Sono Property and limits access across the Sono Property except along the manned control gate on the TKH.

Climate

The climate of the Sono Property area is classified as semi-arid and tropical, with highly erratic and unpredictable amounts of rainfall. Most of the rainfall occurs in the summer months from October to April and often falls in high intensity, localized convectional showers. Winters are very dry, usually with very scarce precipitation in July and August. Annual rainfall is typically around 450 millimetres. Floods and droughts are two major environmental problems facing the country.

Temperatures in the Maun – Ghanzi region range from an average low of 16.0 degrees Celsius (°C) in the winter months to an average high of 33.0°C in October. The average temperature is around 22°C.

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Unlike other sub-Saharan countries where the rainy season can hamper mineral exploration efforts, mineral exploration can be carried out year round on the Sono Property.

Local Resources and Infrastructure

Farms, historic camps and tourism provide a network of roads and the A3 national highway is within 60 km of the Sono Property. There is an existing 132 kilovolt transmission line supplying approximately 20 megawatts (MW) to Maun from a sub-station located in Francistown, around 500 km from Maun by road. Botswana Power Corporation has begun construction of the first 150 MW unit, which is expected to be operational in 2012, at the Morupule power plant. Eventually, Botswana Power plans to increase power generation capacity at Morupule to 600 MW. The town of Ghanzi is supplied by an independent power producer, Bemco, from diesel generators.

Maun is equipped with the labour, supplies, and services required for most of the basic mineral exploration needs for the Sono Project. Maun has an international airport and is connected to Ghanzi located 270 road km southwest from Maun via the A3, an all weather tar-surface road. Maun has a population of 43,776 (2001 census) which can support staffing requirements for both mineral exploration and/or mining operations. Ghanzi which has a population of 9,934 (2001 census) is also another town that could provide staffing requirements for both mineral exploration and/or mining operations.

There is currently no railway in the area. The closest railhead to the Sono Property is at Gobabis in Namibia, which runs west to the deep water port located at Walvis Bay, Namibia. However, Botswana and Namibia have commenced a feasibility study for the construction of a Trans Kalahari Railway to link the two countries. The project has been scheduled to begin in 2012 or 2013 (Figure 2).


Figure 2. Infrastructure map for southern Africa and copper smelter locations (source: Sono Resources, Inc.)

Physiography

The Sono Property lies at an altitude of approximately 1,000 m ASL in the Kalahari sandveld, a gently undulating sand-covered plain with variations of about 150 m from east to west. The almost uniformly flat landscape has a few low hills towards the south of Ngamiland and Ghanzi District. The Kgwebe, Ngwanalekau and Mabeleapodi Hills in the south and southwest of Ngamiland District, and Tsau Hills to the south of the Kuke Fence in Ghanzi District, provide topographic diversity. The main topographic feature in the area is the Ghanzi Ridge, which strikes northeast-southwest. Its peak is at an elevation of 1,134 m near the town of Ghanzi and reaches 924 m elevation near Maun.

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Vegetation varies from the sparse thorn scrub and large open grassy plains of the Kalahari to the medium to dense tree and bush savannah that predominates in the north and east, consisting of grasslands interspersed with trees. The Terminalia tree and bush savannah are predominant within the Sono Property area.

Wildlife is abundant and includes eland, hartebeest, springbok, ostrich, lion, giraffe, leopard, antelope, and elephant. Due to the network of veterinary and ranch fences, many of these animals reside inside the CKGR. Numerous species of birds, reptiles, and insects also reside in the area.

History

Prior Property Ownership and Overview of Major Regional Exploration Programmes

There is no record of previous work conducted on any of the Sono prospecting license blocks; therefore, the approach to exploration by Sono will rely on information provided by both regional airborne geophysical surveys carried out by the Government of Botswana and by historical and current activities on the adjacent properties as reported by competitor activity.

1960’s to 1980

Previous exploration work in the region has been ongoing since the early 1960’s. Johannesburg Investments (“JCI”) initiated a regional geological mapping programme of Western Ngamiland in 1962 but failed to detect any signs of copper mineralisation. In 1967, a joint venture (“JV”) between Anglovaal with De Beers, US Steel, and Tsumeb Corporation, explored the area and have been credited to the early discovery of copper mineralisation found at the Zeta deposit which is currently being developed by Discovery Metals Limited (“DML”).

During the late 1960’s a separate joint venture group that was managed and operated by US Steel continued alone with mineral exploration programmes in the region. Using soil geochemistry, ground geophysics, trenching and drilling, the US Steel JV was successful in identifying additional copper mineralisation targets over a wider area than previously identified by the Anglovaal led joint venture. Although, early successes were obtained, exploration was discontinued by the US Steel joint venture group in 1980 due to low copper prices.

1989 to 1996

In 1989, Anglo American Corporation (“AAC”) took over the exploration properties released by US Steel. AAC conducted a combined airborne magnetic and electromagnetic survey of the region. This was followed up with soil geochemistry, ground geophysics, and drilling. AAC terminated their exploration programme in 1994 due to low copper prices.

In 1996, Delta Gold acquired rights to explore the area, in joint-venture with Kalahari Gold & Copper (Pty) Ltd. and Gencor/BHP Billiton. Much of this work was based on the prior data. Exploration was abandoned in 2000 due to low copper prices.

Property Geology

Lithostratigraphy

The Sono Project lithostratigraphy is comprised of basal Kgwebe Formation, overlain by upper Proterozoic Ghanzi group metasediments, Karoo Supergroup, and Kalahari Group surficial sediments. Matchless Amphibolite Series rocks occur to the north (Figure 3).

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Figure 3. Property Geology of the Sono Property

Kgwebe Formation

The oldest rocks in the area are the Kgwebe Formation, consisting of a bimodal volcanic sequence and derived volcaniclastic sediments. Kgwebe rocks consist of porphyritic rhyolites and subalkaline basalts, with minor pyroclastic flow deposits, peperites, and subaerial basaltic lavas intercalated with localized epiclastic and tuffaceous sediments (Kampunzu et al, 1998). The Kgwebe Formation is depicted as having been emplaced during the initial extensional stages of an intracontinental rift basin. Rifting is thought to have been driven by a thermally-initiated model—the Kalahari Craton being situated above a mantle plume—that supplied high heat flow and mantle convection, driving extension and thinning of the overlying crust. Thermal subsidence and down-sagging of the rift basin along bounding faults has led to the subsequent deposition of fluvial and volcaniclastic sediments over the bimodal volcanic sequence. Previous U-Pb zircon age determinations on the widespread Kgwebe porphyritic rhyolite yielded an age of 1106 ± 2 Ma interpreted as the crystallization age (Schwartz et al. 1996). This age determination imparts a reliable maximum age for the overlying Ghanzi Group sediments that are host to Cu mineralisation of the project (Pretorius and Park, 2011) (Figure 4).

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Figure 4. Tectonostratigraphy of the Ghanzi Project, Kgwebe Formation and Ghanzi Group rocks –(Moodie, 2000). Red line indicates location of Cu mineralisation

Ghanzi Group

The Kgwebe Formation is unconformably overlain by the Ghanzi Group. The Kuke Formation, a 500 m thick crossbedded sandstone unit with conglomerate, was previously assigned to the Kgwebe Formation (Moodie, 1996a,b, Kampunzu et al., 1998). More recent studies, however, show that the Kuke Formation displays an unconformity with the underlying Kgwebe Formation, above which is a thin basal conglomerate with clasts of the underlying volcanic; therefore, it is now regarded as forming the basal part of the Ghanzi Group (Moodie, 2000). Overlying the Kuke Formation are the Ngwako Pan, D'Kar and Mamuno Formations in ascending order of stratigraphy (Figure 3).

Ngwako Pan Formation

The Ngwako Pan Formation is approximately 2,000 m thick and consists of poorly exposed basal wackes overlain by better-sorted red sandstones interbedded with pebbly layers and granule-rich layers. This formation is interpreted to be a fluvial to ebb-and-flow tidal environment type of deposit. The bulk of these sediments are pervasively oxidized red and maroon units, with minor grey coloured reduced units. These units form the footwall of the mineralized horizon (Pretorius and Park, 2011) (Figure 3).

D’Kar Formation (Hanging Wall)

The Ngwako Pan Formation is conformably overlain by the D'Kar Formation, a 1,500 metre thick succession of dominantly finely laminated grey-green siltsones and mudstones with fine-grained interbedded sandstones (Moodie, 2000). The coarser clastic units are generally grey and massive bedded, although, internally both the arenaceous and argillaceous units show good lamination. The D’Kar Formation is also characterized by a dark and light banded rhythmite unit and thin limestone horizons, in part oolitic (Moodie, 2000) (Figure 3).

The D'Kar Formation represents a major regional transgressive sequence. The rocks of this formation are reduced facies and characterized by an abundance of fine-grained pyrite, as well as organic rich shales that may be rich enough in carbon to be classified as black shales. The contact between the Ngwako Pan and D’Kar Formations is a regional-scale reduction-oxidation (redox) front that has chemically localized the precipitation of Cu and Ag, as most of the Cu mineralisation is found along this horizon (Pretorius and Park, 2011) (Figure 3).

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Mamuno Formation

The D'Kar Formation is conformably overlain by 1500 m of Mamuno Formation. This formation mainly consists of red sandstone and mudstone facies and is characterized by cross-bedding and wave ripples. Minor intraclastic limestone horizons are interbedded with the mudstone facies (Moodie, 2000). The interpreted depositional environment is high energy, near-shore environments deposited over deeper water, shallow shelf sediments of the D'Kar Formation (Jones and Desrochers, 1992) (Figure 3).

The widespread sedimentary sequence of basal coarse sandstones overlain by fine-grained intercalated siltstones, mudstones, and shales with minor carbonates is typical of rift sediments deposited within a continental shelf –marginal marine setting. This depositional model for the project agrees with the accepted regional interpretation of the broader Ghanzi Group throughout Botswana and its westward sedimentary counterparts in Namibia (Pretorius and Park, 2011) (Figure 3).

Matchless Amphibolite Series Belt

The Matchless Amphibolite Belt (“MAB”) is a narrow linear zone of deformed and metamorphosed mafic igneous rocks that extend from Namibia to northern Botswana (Breitkopf et al. 1988) (Figure 3). The amphibolites represent tholeiitic basaltic rocks formed in an extensional tectonic setting.

Mineral deposits within the MAB consist of massive and semi-massive pyritic Cu-Zn (-Ag, Au) deposits that are sporadically developed within the Namibian portion of the MAB. Most of the known orebodies along the Namibian portion of the MAB have been deformed to cigar or pencil shape and that the largest of the deposits (Onjihase) contained 16 millions tons.

Overburden

The Ghanzi Group is overlain by the Tertiary-age Kalahari Group sands and calcrete. These units range in thickness from two (2) metres in the south end of the licenses to 30 metres in the north.

Metamorphism and Structural Deformation

The rocks of the Ghanzi-Chobe Belt were affected by regional polyphase deformation and low-grade greenschist metamorphism during the late Neoproterozoic to early Palaeozoic Damaran Orogeny, which was the result of continent-continent collision between the Kalahari and Congo Cratons. The metamorphic grade is mainly greenschist facies with the development of chlorite and sericite in mudstones and shales, and chlorite-epidote vein selvages in sandstones and siltstones (Pretorius and Park, 2011). The metamorphic alteration assemblage is summarised as chlorite-epidote-quartz-calcite-muscovitehematite.

Two main phases of regional scale folding have deformed the Ghanzi Group host rock sequence. The earlier phase of folding (F1) produced cylindrical, close to tight folds about a northeast trending fold axis. Individual F1 folds are remarkably continuous along their NE axial trends, for lengths of up to 100 km. The wavelength of this folding is regionally variable, but is approximately 4 km near Hana Mining’s Banana Zone (Pretorius and Park 2011).

A D2 deformation resulted in the formation of a later generation of F2 folds re-folding the existing F1 folds about the fold axes that trend northwest. The F2 folds are much more open in profile (low amplitude), and fold the earlier F1 structures in a series of broad, regional scale warps. The wavelength for F2 folds is estimated to be approximately 20 km (Pretorius and Park 2011). These broadly spaced warps introduced plunge reversals to the axes of F1 folds, and are responsible for giving Hana Mining’s Banana Zone its characteristic doubly plunging shape.

The F1 / F2 fold interference pattern is classified as Type 1, indicating: (i) that both F1 and F2 folds have a similar shape in profile, (ii) that both fold sets are upright (sub-vertical axial planes), and (iii) the axis of F1 folds is at a high angle to the axis of the overprinting F2 folds (Pretorius and Park 2011).

Due to the paucity of information, the structural geology of the Ghanzi-Chobe Belt s poorly understood. As such, based on the structural interpretation of the known deposits within the Botswana section of the Ghanzi-Chobe Belt, it is characterised by open to tight folding and thrusting along a NE-SW axis resultant from collision tectonics between the Kaapvaal and Congo cratons during the Damara orogen. A later orthogonal compression event, from the northeast, superposed open folds aligned along a NW-SE axis.

Mineralization

There is currently no known mineralization or mineralized zones on the Sono Property. We plan to conduct exploration activities on the Sono Property, which exploration may include the completion of feasibility studies necessary to evaluate whether a commercial mineable mineral exists on the Sono Property. However, we cannot provide any assurance that we will discover any mineralized material in sufficient quantities on the Sono Property to justify commercial operations.

19



ITEM 3. LEGAL PROCEEDINGS

Except as disclosed below, we are not a party to any material legal proceedings nor are we aware of any legal proceedings pending or threatened against us or our properties.

St. Elias

On November 6, 2008, we filed a Writ of Summons and Statement of Claim (collectively, the “Statement of Claim”) against St. Elias and John A. Brophy (“Brophy”) in the Supreme Court of British Columbia. The Statement of Claim related to the Vilcoro Property Option Agreement.

The Statement of Claim alleged the following claims: (i) in tort against Brophy alleging non-disclosure of material facts and complete and accurate information relating to the ownership of the Vilcoro Property and to the ownership of the adjacent property, including failing to disclose that Brophy and his wife had an interest in the Vilcoro Property and the adjacent property, which entitled us to rescind the Property Option Agreement and return of an aggregate of $150,000 paid to St. Elias under the Property Option Agreement, an aggregate of $486,000 paid in exploration expenditures, and 12,500 shares of our common stock issued to St. Elias; (ii) breach of the Property Option Agreement relating to the failure by St. Elias to provide to us all data and information in its possession or under its control relating to St. Elias’ exploration activities on and in the vicinity of the Vilcoro Properties; and (iii) breach of the Technical Services Agreement by failure of St. Elias to timely prepare and provide a budget or work programs or to expeditiously advance the work on the Vilcoro Properties and diversion by St. Elias of money, time and resources.

On December 23, 2008, a statement of defense was filed by St. Elias and Brophy denying the majority of the allegations made by us in our Statement of Claim. In addition, St. Elias and Brophy also filed a counter claim against us for abuse of process and punitive damages.

We sought to rescind the Property Option Agreement and the Technical Services Agreement and damages associated with tortious misrepresentation and breach, punitive or exemplary damages.

On May 5, 2010, we entered into that certain mutual release with St. Elias pursuant to which we and St. Elias agreed to release one another from all causes of action, claims and demands of any nature or kind whatsoever arising out of or in any way related to any of the subject matter of the Statement of Claim. On July 12, 2010, the 12,500 common stock shares were returned to treasury and cancelled.

Kivel

On October 26, 2009, Stacey Kivel, former president of the Company filed a lawsuit of wrongful dismissal in the State of Nevada. During July 2007, we terminated the employment of Stacey Kivel, our then President, for cause. Subsequently, Ms. Kivel made certain false allegations against us. We refuted her allegations and believed termination was justified. On October 13, 2010 all parties agreed to a settlement to which the Company agreed to pay Ms. Kivel, $40,000 (paid on October 27, 2010).

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ITEM 4. (REMOVED AND RESERVED)

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Shares of our common stock have been quoted on the OTC Bulletin Board since approximately December 1, 2006. From December 1, 2006 to May 23, 2011 shares of our common stock were quoted on the OTC Bulletin Board under the symbol “GVRS” and from May 23, 2011 to date under the symbol “SRCI”. The market for our common stock is limited, volatile and sporadic. The following table sets forth the high and low prices relating to our common stock for the periods indicated, as provided by the OTC Bulletin Board. These quotations reflect inter-dealer prices without retail mark-up, mark-down, or commissions, and may not reflect actual transactions.

QUARTER ENDED HIGH LOW
May 31, 2011 $1.29 $0.45
February 28, 2011 $0.60 $0.50
November 30, 2010 $1.50 $0.30
August 31, 2010 $1.40 $0.25
May 31, 2010 $1.20 $0.16
February 28, 2010 $4.04 $0.16
November 30, 2009 $0.60 $0.12
August 31, 2009 $0.24 $0.08
May 31, 2009 $0.16 $0.08

Holders

As of September 13, 2011, we had 29 shareholders of record, which does not include shareholders whose shares are held in street or nominee names. We believe that there are approximately 1,000 beneficial owners of our common stock.

Dividend Policy

No dividends have been declared or paid on our common stock. We have incurred recurring losses and do not currently intend to pay any cash dividends in the foreseeable future.

Securities Authorized For Issuance Under Compensation Plans

On May 9, 2007, our Board of Directors authorized and approved the adoption of the 2007 Plan effective May 9, 2007, under which an aggregate of 1,250,000 of our shares may be issued. The purpose of the 2007 Plan is to enhance our long-term stockholder value by offering opportunities to our directors, officers, employees and eligible consultants to acquire and maintain stock ownership in order to give these persons the opportunity to participate in our growth and success, and to encourage them to remain in our service.

The 2007 Plan is to be administered by our Board of Directors or a committee appointed by and consisting of one or more members of the Board of Directors, which shall determine (i) the persons to be granted Stock Options under the 2007 Plan; (ii) the number of shares subject to each option, the exercise price of each Stock Option; and (iii) whether the Stock Option shall be exercisable at any time during the option period up to ten (10) years or whether the Stock Option shall be exercisable in installments or by vesting only. 2007 Plan provides authorization to the Board of Directors to grant Stock Options to purchase a total number of shares of our common stock not to exceed 5,000,000 shares as at the date of adoption by the Board of Directors of the 2007 Plan. At the time a Stock Option is granted under the 2007 Plan, the Board of Directors shall fix and determine the exercise price at which shares of our common stock may be acquired.

In the event an optionee ceases to be employed by or to provide services to us for reasons other than cause, retirement, disability or death, any Stock Option that is vested and held by such optionee generally may be exercisable within three months after the effective date that his position ceases, and after such three month period any unexercised Stock Option shall expire. In the event an optionee ceases to be employed by or to provide services to us for reasons of retirement, disability or death, any Stock Option that is vested and held by such optionee generally may be exercisable within up to one-year after the effective date that his position ceases, and after such one-year period any unexercised Stock Option shall expire.

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No Stock Options granted under the Stock Option Plan will be transferable by the optionee, and each Stock Option will be exercisable during the lifetime of the optionee subject to the option period up to ten (10) years or limitations described above. Any Stock Option held by an optionee at the time of his death may be exercised by his estate within one (1) year of his death or such longer period as the Board of Directors may determine.

The exercise price of a Stock Option granted pursuant to the 2007 Plan shall be paid in full to us by delivery of consideration equal to the product of the Stock Option in accordance with the requirements of the Nevada Revised Statutes. Any Stock Option settlement, including payment deferrals or payments deemed made by way of settlement of pre-existing indebtedness, we may be subject to such conditions, restrictions and contingencies as may be determined.

The table set forth below presents information relating to our equity compensation plans as of the date of May 31, 2011:






Plan Category

Number of Securities to
be Issued Upon Exercise
of Outstanding Options,
Warrants and Rights
(a)

Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
(b)
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (excluding column
(a))
       
Equity Compensation
Plans to be Approved by
Security Holders


n/a


n/a


n/a
       
Equity Compensation
Plans Not Approved by
Security Holders (2007,
Stock Option Plan)



Nil



Nil



Nil

Recent Sales of Unregistered Securities

We did not issue any unregistered securities during our fiscal year ended May 31, 2011. Subsequent to our year ended May 31, 2011, we issued an aggregate of 7,500,000 shares of restricted common stock, as follows:

  • On August 2, 2011, we issued 6,500,000 shares to Tignish (Pty) Ltd to acquire a 95% interest in Bonnyridge (Pty) Ltd pursuant to a Share Purchase Agreement as described in Item 1 (Business) above.

  • On August 30, 2011, we issued 1,000,000 shares to two persons to acquire the remaining 5% interest in Bonnyridge as described in Item 1 (Business) above.

In each case these share were issued to non-U.S. persons in reliance on Regulation S.

No Repurchases

Neither we nor any affiliated purchaser has made any purchases of our equity securities during the fourth quarter of our fiscal year ended May 31, 2011.

ITEM 6. SELECTED FINANCIAL DATA

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition, changes in financial condition, plan of operations and results of operations should be read in conjunction with (i) our audited financial statements as at May 31, 2011, May 31, 2010 and for the period from inception (April 5, 2004) to May 31, 2011 and (ii) the section entitled “Business”, included in this annual report. The discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including, but not limited to, those set forth under “Risk Factors” and elsewhere in this annual report.

Plan of Operations

Our plan of operations over the next twelve months is to focus on the exploration of our newly acquired Bonnyridge copper/silver concession area located within the central portion of the Kalahari Copper Belt in Botswana. We are implementing a complementary exploration technique, namely analyzing for mobile metal ions - a method using soil samples to detect mineralization at depth where small concentrations of metals coating sand grains are brought to the surface by the action of water in the soil. The procedure of analyzing mobile metal ions or MMI is used to chemically strip off the adhered elements, which have migrated upwards from depth, from the surface of soil grains and then determine the low-level range of metal ion concentrations, which are commonly in the parts per billion range. By measuring mobile metal ions in surface soils, the technology has provided sharp anomalies over deeper seated ore deposits below the Kalahari in other areas. Utilizing this method, we anticipate reducing exploration costs by improving target generation for follow-up high resolution airborne and ground geophysics and drilling. We estimate that we will be in a position to commence a drilling program in the third quarter of calendar year 2011.

We estimate that our exploration costs for the next twelve months will be approximately $1,750,000. In addition, we estimate that our other expenses during that period will be approximately $300,000, for total estimated expenditures of $2,050,000. As at May 31, 2011, we had cash on hand of $6,476, total current assets of $212,705, and a working capital deficit of $381,771. As such, we will require additional capital in order to pursue our plan of operations.

Financial Condition

During the twelve-month period following the date of this annual report, we anticipate that we will not generate any revenue. Accordingly, we will be required to obtain additional financing in order to pursue our plan of operations during and beyond the next twelve months. We believe that debt financing will not be an alternative for funding as we do not have tangible assets to secure any debt financing. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock. However, we do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our aforementioned exploration program. In the absence of such financing, we will not be able to continue exploration of the property underlying our mineral claim interest and our business plan will fail. Even if we are successful in obtaining equity financing to fund any continuation of our exploration program, there is no assurance that we will obtain the funding necessary to pursue any advanced exploration of the property underlying our mineral claim interest. If we do not continue to obtain additional financing, we will be forced to abandon our mineral claim interest.

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Results of Operations

The following table sets out our losses for the periods indicated:

                Accumulated  
    For the Year     For the Year     from Inception  
    Ended     Ended     (April 5, 2004) to  
    May 31,     May 31,     May 31,  
    2011     2010     2011  
       
                   
Revenue   -     -     46,974  
Direct Costs   -     -     56,481  
Gross Margin (loss)   -     -     (9,507 )
General and Administrative Expenses                  
Office and general   70,850     19,834     234,379  
Consulting fees   76,500     43,050     816,484  
Marketing expenses   -     -     894,738  
Management fees   48,440     -     1,289,846  
Mineral property expenditures   -     -     8,258,312  
Professional fees   92,535     199,796     1,249,945  
Total General and Administrative Expenses   (288,325 )   (262,680 )   12,743,704  
Net Operating Loss   (288,325 )   (262,680 )   (12,753,211 )
Other Income (Expense)                  
Gain on extinguishment of accrued liability   -     -     30,000  
Loss on option deposit   -     (170,474 )   (170,474 )
Net gain on settlements   -     -     5,590,784  
Legal settlement   (38,000 )   -     (38,000 )
Loss on disposal of available for sale securities   -     (215,190 )   (215,190 )
Beneficial conversion feature   -     (592,062 )   (592,062 )
Interest expense   (4,245 )   (87,383 )   (341,027 )
Total Other Income (Expense)   (42,245 )   (1,065,109 )   4,264,031  
Net loss for the Period   (330,570 )   (1,327,789 )   (8,489,180 )
Comprehensive Loss                  
Change in market value of securities   -     (190 )   (215,190 )
Loss realized on disposal of securities   -     215,190     215,190  
Comprehensive Loss $ (330,570 ) $ (1,112,789 ) $ (8,489,180 )

Results of Operations for the Years Ended May 31, 2011 and 2010

Our comprehensive loss during fiscal year ended May 31, 2011 was ($330,570) compared to comprehensive loss of ($1,112,789) for fiscal year ended May 31, 2010 (a decrease in comprehensive loss of $782,219). During fiscal years ended May 31, 2011 and May 31, 2010, respectively, we did not generate any revenue.

During fiscal year ended May 31, 2011, we incurred general and administrative expenses in the aggregate amount of $288,325 compared to $262,680 incurred during fiscal year ended May 31, 2010 (an increase of $25,645). The operating expenses incurred during fiscal year ended May 31, 2011 consisted of: (i) office and general of $70,850 (2010: $19,834); (ii) consulting fees of $76,500 (2010: $43,050); (iii) management fees of $48,440 (2010: Nil); and (iv) professional fees of $92,535 (2010: $199,796). General and administrative expenses generally include corporate overhead, financial and administrative contracted services, marketing and consulting costs.

This resulted in a net operating loss of ($288,325) during fiscal year ended May 31, 2011 compared to a net operating loss of ($262,680) during fiscal year ended May 31, 2010.

During fiscal year ended May 31, 2011, we recorded total other expense in the amount of ($42,245) compared to total other expense recorded during fiscal year ended May 31, 2010 in the amount of ($1,065,109). The other expense incurred during fiscal year ended May 31, 2011 consisted of: (i) loss on option deposit $Nil, (2010: $170,474); (ii) loss on disposal of available for sale of securities relating to the Petaquilla shares of $Nil (2010: $215,190); (iii) interest expense of $4,245 (2010: $87,383); (iv) beneficial conversion feature of $Nil (2010: $592,062); and (v) legal settlements of $38,000 ( 2010: Nil).

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During fiscal year ended May 31, 2011, we also recorded comprehensive loss of: (i) $Nil (2010: $190) relating to the change in market value of available for sale of the Petaquilla shares of common stock; and (ii) $Nil (2010: $215,190) in loss realized on disposal of securities.

This resulted in comprehensive loss for fiscal year ended May 31, 2011 of ($330,570) compared to comprehensive loss for fiscal year ended May 31, 2010 of ($1,112,789).

The decrease in comprehensive loss during fiscal year ended May 31, 2011 compared to fiscal year ended May 31, 2010 is attributable primarily to the recording of the $592,062 beneficial conversion feature, $170,474 in loss on option deposit and $215,190 in loss on disposal of available for sale securities during fiscal year ended May 31, 2010. This resulted from the return by Petaquilla of the 100,000 shares of common stock with a previous estimated fair value of $270,000. As of May 31, 2009, the 100,000 shares received had an estimated fair value of $55,000. During fiscal year ended May 31, 2010, we sold the shares for net proceeds of $54,810 for a loss on disposal of $215,190.

Liquidity and Capital Resources

Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

As at May 31, 2011, our current assets were $212,705 and our current liabilities were $594,476, resulting in a working capital deficit of ($381,771). As at May 31, 2011, our total assets were $212,705 compared to total assets of $2,141 as at May 31, 2010. Total assets as at May 31, 2011 consisted of $6,476 in cash, $6,000 due from a related company, $229 in prepaid expenses and $200,000 in deposits on mineral property. As at May 31, 2011, our current liabilities were $594,476 compared to current liabilities of $378,087 as at May 31, 2010. Our current liabilities consisted of $594,476 in accounts payable and accrued liabilities.

Stockholders’ deficit decreased from ($375,946) as at May 31, 2010 to ($708,516) as at May 31, 2011.

Net Cash Used in Operating Activities

We have not generated positive cash flows from operating activities. For fiscal year ended May 31, 2011, net cash flow used in operating activities was ($118,165) compared to net cash flow used in operating activities of ($105,648) for fiscal year ended May 31, 2010. Net cash flow used in operating activities during fiscal year ended May 31, 2011 consisted primarily of a net loss of ($330,570) adjusted by $2,000 in non-cash legal settlements. Net cash flow used in operating activities was further changed by $4,245 in accrued interest on shareholder’s loan, $216,389 in accounts payable and accrued liabilities, ($6,000) in due to related parties and ($229) in prepaid expenses.

Net Cash Used in Investing Activities

During fiscal year ended May 31, 2011, net cash flow used in investing activities was $200,000 from deposits on mineral property, as compared to cash flow provided by investing activities of $54,810 during fiscal year ended May 31, 2010 from proceeds on disposal of available for sale securities.

Net Cash from Financing Activities

During fiscal year ended May 31, 2011, net cash flow provided from financing activities was $322,500 compared to net cash flow provided from financing activities of $50,904 for fiscal year ended May 31, 2010. Net cash flow provided from financing activities during fiscal year ended May 31, 2011 pertained primarily to $327,500 received as proceeds from shareholder advances offset by ($5,000) in repayment of shareholder advances.

Going Concern

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive exploration activities. For these reasons our auditors stated in their report on our audited financial statements for the year ended May 31, 2011 that they have substantial doubt we will be able to continue as a going concern.

25


Future Financings

We anticipate continuing to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned exploration activities.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Critical Accounting Policies

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

We believe the following critical accounting policies require us to make significant judgments and estimates in the preparation of our consolidated financial statements.

Mineral Property Expenditures

The Company is primarily engaged in the acquisition, exploration and development of mineral properties.

Mineral property acquisition costs are capitalized in accordance with FASB ASC 930-805, “Extractive Activities-Mining,” when management has determined that probable future benefits consisting of a contribution to future cash inflows have been identified and adequate financial resources are available or are expected to be available as required to meet the terms of property acquisition and budgeted exploration and development expenditures. Mineral property acquisition costs are expensed as incurred if the criteria for capitalization are not met. In the event that mineral property acquisition costs are paid with Company shares, those shares are recorded at the estimated fair value at the time the shares are due in accordance with the terms of the property agreements.

Mineral property exploration costs are expensed as incurred.

When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves and pre-feasibility, the costs incurred to develop such property are capitalized.

Estimated future removal and site restoration costs, when determinable are provided over the life of proven reserves on a units-of-production basis. Costs, which include production equipment removal and environmental remediation, are estimated each period by management based on current regulations, actual expenses incurred, and technology and industry standards. Any charge is included in exploration expense or the provision for depletion and depreciation during the period and the actual restoration expenditures are charged to the accumulated provision amounts as incurred.

As of the date of these financial statements, the Company has incurred only property option payments and exploration costs which have been expensed.

To date the Company has not established any proven or probable reserves on its mineral properties.

26


Asset Retirement Obligations

The Company has adopted the provisions of FASB ASC 410-20 “Asset Retirement and Environmental Obligations,” which establishes standards for the initial measurement and subsequent accounting for obligations associated with the sale, abandonment or other disposal of long-lived tangible assets arising from the acquisition, construction or development and for normal operations of such assets. The adoption of this standard has had no effect on the Company’s financial position or results of operations. As of May 31, 2011, any potential costs relating to the ultimate disposition of the Company’s mineral property interests are not yet determinable.

Income Taxes

The Company follows the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax balances. Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment. As at May 31, 2011, the Company had net operating loss carryforwards, however, due to the uncertainty of realization, the Company has provided a full valuation allowance for the deferred tax assets resulting from these loss carryforwards. Deferred income taxes are reported for timing differences between items of income or expense reported in the financial statements and those reported for income tax purposes in accordance with FASB ASC 740-10, “Income Taxes,” which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for tax loss and credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not.

Cash and cash equivalents

Cash and cash equivalents include highly liquid investments with original maturities of three months or less.

Available For Sale Securities

The Company’s holdings in marketable securities classified as available-for-sale are carried at fair value. The carrying value of marketable securities is reviewed each reporting period for declines in value that are considered to be other-than temporary and, if appropriate, the investments are written down to their estimated fair value. Realized gains and losses and declines in value judged to be other-than-temporary on available for sale securities are included in the Company’s statements of operations. Unrealized gains and unrealized losses deemed temporary are included in accumulated other comprehensive income (loss).

As of May 31, 2011, the Company has no shares classified as available for sale securities. During the year ended May 31, 2010 the Company sold all of the shares previously classified as available for sale for net proceeds to the Company of $54,810 and realized a loss of $215,190.

Net Income (Loss) per Share

The Company computes income (loss) per share in accordance with FASB ASC 260-10, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.

Foreign Currency Translation

The financial statements are presented in United States dollars. In accordance with FASB ASC 830-10, “Foreign Currency Matters,” foreign denominated monetary assets and liabilities are translated to their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Revenue and expenses are translated at average rates of exchange during the period. Related translation adjustments are reported as a separate component of stockholders’ equity, whereas gains or losses resulting from foreign currency transactions are included in results of operations. At May 31, 2011, the Company has not recorded any translation adjustments into stockholders’ equity.

27


Stock-based Compensation

On June 1, 2006, the Company adopted FASB ASC 718-10, “Compensation-Stock Compensation”, under this method, compensation cost recognized for the year ended May 31, 2007 includes: a) compensation cost for all share-based payments granted prior to, but not yet vested as of May 31, 2006, based on the grant-date fair value estimated in accordance with the original provisions of SFAS 123, and b) compensation cost for all share-based payments granted subsequent to May 31, 2006, based on the grant-date fair value estimated in accordance with the provisions of FASB ASC 718-10. In addition, deferred stock compensation related to non-vested options is required to be eliminated against additional paid-in capital upon adoption of FASB ASC 718-10. The results for the prior periods were not restated.

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 505-50 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.

Fair Value of Financial Instruments

In accordance with the requirements of FASB ASC 820-10, the Company has determined the estimated fair value of financial instruments using available market information and appropriate valuation methodologies. The fair value of financial instruments classified as current assets or liabilities approximate their carrying value due to the short-term maturity of the instruments.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

ITEM 8. FINANCIAL STATEMENTS

28


De Joya Griffith & Company, LLC
____________________________________________

CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS

Report of Independent Registered Public Accounting Firm

To The Board of Directors and Stockholders
Sono Resources, Inc.

We have audited the accompanying balance sheets of Sono Resources, Inc. (An Exploration Stage Company) as of May 31, 2011 and 2010, and the related statements of operations, stockholders’ deficit, and cash flows for each of the two-year periods ended May 31, 2011 and 2010 and the period from inception (April 5, 2004) to May 31, 2011. Sono Resources’ management is responsible for these financial statements. Our responsibility is to express an opinion on the financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Sono Resources, Inc. as of May 31, 2011 and 2010, and the results of its operations and its cash flows for each of the two-year periods ended May 31, 2011 and 2010 and the period from inception (April 5, 2004) to May 31, 2011, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations, which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

De Joya Griffith & Company, LLC

/s/ De Joya Griffith & Company, LLC
Henderson, NV
September 9, 2011

29



SONO RESOURCES, INC.
(formerly Geneva Resources Inc.)
(An Exploration Stage Company)
 
BALANCE SHEETS

    May 31,     May 31,  
    2011     2010  
    (Audited)     (Audited)  
ASSETS    
             
CURRENT ASSETS            
             
     Cash $  6,476   $  2,141  
     Due from related company (Note 7)   6,000     -  
     Prepaid expenses   229     -  
     Deposit on mineral property (Note 3)   200,000     -  
             
TOTAL CURRENT ASSETS   212,705     2,141  
             
             
TOTAL ASSETS $  212,705   $  2,141  
             
             
LIABILITIES AND STOCKHOLDERS’ DEFICIT   
             
CURRENT LIABILITIES            
     Accounts payable and accrued liabilities $  594,476   $  378,087  
             
TOTAL CURRENT LIABILITIES   594,476     378,087  
             
SHAREHOLDERS’ LOANS AND ACCRUED INTEREST (Note 6)   326,745     -  
             
TOTAL LIABILITIES   921,221     378,087  
             
GOING CONCERN CONTINGENCY AND COMMITMENTS (Notes 1 and 9)            
             
STOCKHOLDERS’ DEFICIT            
     Capital stock (Note 4)            
     Authorized
            50,000,000 shares of common stock, $0.001 par value,
           
     Issued and outstanding
            26,173,278 shares of common stock (May 31, 2010 –26,185,778)
 
26,173
   
26,186
 
     Additional paid-in capital   7,754,491     7,756,478  
     Deficit accumulated during the exploration stage   (8,489,180 )   (8,158,610 )
             
TOTAL STOCKHOLDERS’ DEFICIT   (708,516 )   (375,946 )
             
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $  212,705   $  2,141  

The accompanying notes are an integral part of these financial statements.

30



SONO RESOURCES, INC.
(formerly Geneva Resources Inc.)
(An Exploration stage company)
 
STATEMENTS OF OPERATIONS
(Audited)

                Inception  
    Year ended     Year ended     (April 5, 2004)  
    May 31, 2011     May 31, 2010     May 31, 2011  
                   
REVENUE $  -   $  -   $  46,974  
                   
DIRECT COSTS   -     -     56,481  
                   
GROSS MARGIN (LOSS)   -     -     (9,507 )
                   
GENERAL AND ADMINISTRATIVE EXPENSES                  
     Office and general   70,850     19,834     234,379  
     Consulting fees   76,500     43,050     816,484  
     Marketing expenses   -     -     894,738  
     Management fees   48,440     -     1,289,846  
     Mineral property expenditures (Note 3)   -     -     8,258,312  
     Professional fees   92,535     199,796     1,249,945  
                   
TOTAL GENERAL & ADMINISTRATION EXPENSES   (288,325 )   (262,680 )   (12,743,704 )
                   
NET OPERATING LOSS   (288,325 )   (262,680 )   (12,753,211 )
                   
OTHER INCOME (EXPENSES)                  
   Gain on extinguishment of accrued liability   -     -     30,000  
   Loss on option deposit   -     (170,474 )   (170,474 )
   Net gain on settlements   -     -     5,590,784  
   Legal settlements   (38,000 )   -     (38,000 )
   Loss on disposal of available for sale securities   -     (215,190 )   (215,190 )
   Beneficial conversion feature   -     (592,062 )   (592,062 )
   Interest expense   (4,245 )   (87,383 )   (341,027 )
                   
TOTAL OTHER INCOME (EXPENSE)   (42,245 )   (1,065,109 )   4,264,031  
                   
NET LOSS   (330,570 )   (1,327,789 )   (8,489,180 )
                   
COMPREHENSIVE LOSS                  
     Change in market value of securities   -     (190 )   (215,190 )
     Loss realized on disposal of securities   -     215,190     215,190  
                   
COMPREHENSIVE LOSS $  (330,570 ) $  (1,112,789 ) $  (8,489,180 )
                   
LOSS PER COMMON SHARE - BASIC $  (0.01 ) $  (0.08 )    
                   
COMPREHENSIVE LOSS PER COMMON SHARE - BASIC $  (0.01 ) $  ( 0.06 )    
                   
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC   26,174,716     17,529,344      

The accompanying notes are an integral part of these financial statements.

31



SONO RESOURCES, INC.
(formerly Geneva Resources Inc.)
(An exploration stage company)
STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE PERIOD FROM INCPETION (APRIL 5, 2004) TO MAY 31, 2011

                                  Deficit        
    Common Stock                 Accumulated     Accumulated        
                Additional     Private     Other     During the        
    Number of           Paid-in       Placement     Comprehensive     Development        
    shares     Amount     Capital     Subscriptions     loss     Stage     Total  
                                           
Shares issued for cash – at $0.0016 per share, April 5, 2004   5,775,000   $  5,775   $  3,392   $  -   $  -   $  -   $  9,167  
Net loss for the period   -     -     -     -     -     (5,427 )   (5,427 )
                                           
Balance, May 31, 2004   5,775,000     5,775     3,392     -     -     (5,427 )   3,740  
Shares issued for cash – at $0.00952 per share, November 30, 2004   6,825,000     6,825     58,175     -     -     -     65,000  
Net loss for the period   -     -     -     -     -     (66,246 )   (66,246 )
                                           
Balance, May 31, 2005   12,600,000     12,600     61,567     -     -     (71,673 )   2,494  
Shares issued for cash – at $0.0238 per share, December 8, 2005   4,200,000     4,200     95,800     -     -     -     100,000  
Net loss for the period   -     -     -     -     -     (65,081 )   (65,081 )
                                           
Balance, May 31, 2006   16,800,000     16,800     157,367     -     -     (136,754 )   37,413  
Shares returned to treasury – September 27, 2006   (7,500,000 )   (7,500 )   7,500     -     -     -     -  
Shares issued for Property Option Agreement – December 1, 2006 (Note 3 & 4)   1,000,000     1,000     7,399,000     -     -     -     7,400,000  
Stock based compensation (Note 5)   -     -     965,671     -     -     -     965,671  
Net loss for the period   -     -     -     -     -     (9,887,736 )   (9,887,736 )
                                           
Balance, May 31, 2007   10,300,000     10,300     8,529,538     -     -     (10,024,490 )   (1,484,652 )
Shares issued for Property Option Agreements – October 15, 2007 and January 31, 2008 (Note 3 & 4)   15,000     15     79,985     -     -     -     80,000  
Subscription proceeds received (Note 4)   -     -     -     400,000     -     -     400,000  
Shares returned pursuant to Petaquilla settlement - March 14, 2008 (Note 3 & 4)   (1,000,000 )   (1,000 )   (5,439,000 )   -     -     -     (5,440,000 )
Shares issued for debt settlement – at $4.00 per share, May 29, 2008 (Note 4)   219,216     219     1,095,859     -     -     -     1,096,078  
Stock based compensation (Note 5)   -     -     388,500     -     -     -     388,500  
Net income for the period   -     -     -     -     -     3,886,534     3,886,534  
                                           
Balance, May 31, 2008   9,534,216   $  9,534   $  4,654,882   $  400,000   $  -   $  (6,137,956 ) $  (1,073,540 )

The accompanying notes are an integral part of these financial statements.

32



SONO RESOURCES, INC.
(formerly Geneva Resources Inc.)
(An exploration stage company)
STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE PERIOD FROM INCEPTION (APRIL 5, 2004) TO MAY 31, 2011

                                  Deficit        
    Common Stock                 Accumulated     Accumulated        
                Additional     Private     Other     During the        
    Number of           Paid-in       Placement     Comprehensive     Development        
    shares     Amount     Capital     Subscriptions     loss     Stage     Total  
Balance, May 31, 2008 – balance forward   9,534,216   $  9,534   $  4,654,882   $  400,000   $  -   $  (6,137,956 ) $  (1,073,540 )
Shares issued for cash at $4.00 per share - September 9, 2008   100,000     100     399,900     (400,000 )   -     -     -  
Unrealized loss on marketable securities   -     -     -     -     (215,000 )   -     (215,000 )
Net loss   -     -     -     -     -     (692,865 )   (692,865 )
Balance, May 31, 2009   9,634,216     9,634     5,054,782     -     (215,000 )   (6,830,821 )   (1,981,405 )
Shares issued for debt settlement at $0.12 per share - December 7, 2010 (Note 4)   14,801,562     14,802     1,761,384     -     -     -     1,776,186  
Beneficial conversion feature (Note 6)   -     -     592,062     -     -     -     592,062  
Shares issued for cash at $0.20 per share - December 8, 2010   1,750,000     1,750     348,250     -     -     -     350,000  
Unrealized loss on marketable securities   -     -     -     -     (190 )   -     (190 )
Loss on disposal of marketable securities   -     -     -     -     215,190     -     215,190  
Net loss   -     -     -     -     -     (1,327,789 )   (1,327,789 )
Balance, May 31, 2010   26,185,778     26,186     7,756,478     -     -     (8,158,610 )   (375,946 )
Shares returned to treasury pursuant to St. Elias settlement ( Notes 3 and 4)   (12,500 )   -     (2,000 )   -     -     -     (2,000 )
Net loss   -     -     -     -     -     (330,570 )   (330,570 )
Balance, May 31, 2011 (audited)   26,173,278   $  26,173   $  7,754,491   $  -   $  -   $  (8,489,180 ) $  (708,516 )

The accompanying notes are an integral part of these financial statements.

33



SONO RESOURCES, INC.
(formerly Geneva Resources Inc.)
(An Exploration stage company)
STATEMENTS OF CASH FLOWS
(Audited)

                Inception  
                (April 5, 2004)
    Year ended     Year ended     to May 31,  
    May 31, 2011     May 31, 2010     2011  
                   
CASH FLOWS FROM OPERATING ACTIVITIES                  
   Net loss $  (330,570 ) $  (1,327,789 ) $  (8,489,180 )
   Adjustments to reconcile net loss to net cash used in operating activities:                  
       Non-cash mineral property expenditures   -     165,010     7,580,010  
       Non-cash legal settlements   (2,000 )         (2,000 )
       Non-cash net gain on settlement   -     -     (5,490,784 )
       Non-cash disposal of available for sale securities   -     215,190     215,190  
       Non-cash gain on extinguishment of accrued liability   -     -     (30,000 )
       Stock-based compensation   -     -     1,354,171  
       Non-cash interest related to beneficial conversion feature   -     592,062     592,062  
 Changes in operating assets and liabilities:                  
       Increase in deposits   -     -     (100,010 )
       Accrued interest on shareholder’s loan   4,245     87,383     341,027  
       Due from related parties   (6,000 )   -     110,500  
       Prepaid expenses   (229 )   -     (229 )
       Accounts payable and accrued liabilities   216,389     162,496     1,384,838  
                   
NET CASH USED IN OPERATING ACTIVITIES   (118,165 )   (105,648 )   (2,534,405 )
                   
CASH FLOWS FROM INVESTING ACTIVITIES                  
   Deposit on mineral property   (200,000 )   -     (200,000 )
   Proceeds on disposal of available for sale securities   -     54,810     54,810  
                   
NET CASH (USED IN)PROVIDED BY INVESTING ACTIVITIES   (200,000 )   54,810     (1,45,190 )
                   
CASH FLOWS FROM FINANCING ACTIVITIES                  
   Proceeds on sale and subscriptions of common stock   -     350,000     924,167  
   Proceeds from shareholder advances   327,500     25,904     2,091,904  
   Repayment of shareholder advances   (5,000 )   (325,000 )   (330,000 )
                   
    322,500     50,904     2,686,071  
NET CASH PROVIDED BY FINANCING ACTIVITIES                  
                   
NET INCREASE IN CASH   4,335     66     6,476  
                   
CASH, BEGINNING   2,141     2,075     -  
                   
CASH, ENDING $  6,476   $  2,141   $  6,476  
                   
SUPPLEMENTAL CASH FLOW INFORMATION AND NONCASH INVESTING AND FINANCING ACTIVITIES  
Cash paid during the period for:                  
     Interest $  -   $  -   $  -  
     Income taxes $  -   $  -   $  -  
                   
Shares issued for settlement of liability $     $  1,776,186   $  2,872,264  
                   
Shares issued as deposit on option to purchase in mineral properties $  -   $  -   $  65,000  

The accompanying notes are an integral part of these financial statements.

34



SONO RESOURCES, INC.
(formerly Geneva Resources Inc.)
(An exploration stage company)
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2011 (Audited)

NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION

The Company was incorporated in the State of Nevada on April 5, 2004. The Company was initially formed to engage in the business of reclaiming and stabilizing land in preparation for construction in the United States of America. On November 27, 2006, the Company filed Articles of Merger with the Secretary of State of Nevada in order to effectuate a merger whereby the Company (as Revelstoke Industries, Inc.) would merge with its wholly-owned subsidiary, Geneva Gold Corp. This merger became effective as of December 1, 2006 and the Company changed its name to Geneva Gold Corp. On March 1, 2007, the Company (Geneva Gold Corp.) merged with its wholly-owned subsidiary, Geneva Resources, Inc., pursuant to Articles of Merger that the Company filed with the Nevada Secretary of State. This merger became effective March 1, 2007 and the Company changed its name to Geneva Resources, Inc. On February 10, 2011 the Company (Geneva Resources Inc.) merged with its newly incorporated wholly-owned subsidiary, Sono Resources, Inc., pursuant to Articles of Merger that the Company filed with the Nevada Secretary of State. This merger became effective March 11, 2011 and the Company changed its name to Sono Resources, Inc. The Company is an exploration stage enterprise, as defined in FASB ASC 915 “Development Stage Entities.”

During 2007, the Company entered the business of exploration of precious metals with a focus on the exploration and development of gold deposits in North America and Internationally. During this period the Company entered into Option Agreements to obtain mineral leases in Canada, Panama, Peru and Nigeria. On April 1, 2011, the Company entered into an Option Agreement to acquire mineral leases in Botswana, Africa (see Note 3(d)).

The Company has a fiscal year of May 31. On May 5, 2006, the Company completed a forward stock split by the issuance of 42 new shares for each 1 outstanding share of the Company’s common stock. On October 13, 2006, the Company completed a forward stock split by the issuance of 4 new shares for each 1 outstanding share of the Company’s stock. On June 18, 2010, the Company completed a reverse stock split by the issuance of 1 new share for each 4 outstanding shares of the Company’s stock.

All references in these financial statements to number of common shares, price per share and weighted average number of common shares outstanding prior to the 42:1 forward split and the 4:1 forward split and the 1:4 to reverse split have been adjusted to reflect these stock splits on a retroactive basis, unless otherwise noted.

Going concern
To date the Company has generated minimal revenues from its business operations and has incurred operating losses since inception of $8,489,180. As at May 31, 2011, the Company has a working capital deficit of $381,771. The Company requires additional funding to meet its ongoing obligations and to fund anticipated operating losses. The ability of the Company to continue as a going concern is dependent on raising capital to fund its initial business plan and ultimately to attain profitable operations. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern. The Company intends to continue to fund its mineral exploration business by way of private placements and advances from related parties as may be required. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

35



SONO RESOURCES, INC.
(formerly Geneva Resources Inc.)
(An exploration stage company)
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2011 (Audited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation
These financial statements are presented in United States dollars and have been prepared in accordance with generally accepted accounting principles in the United States of America.

Use of Estimates and Assumptions
Preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the period. Accordingly, actual results could differ from those estimates.

Mineral Property Expenditures
The Company is primarily engaged in the acquisition, exploration and development of mineral properties.

Mineral property acquisition costs are capitalized in accordance with FASB ASC 930-805, “Extractive Activities-Mining,” when management has determined that probable future benefits consisting of a contribution to future cash inflows have been identified and adequate financial resources are available or are expected to be available as required to meet the terms of property acquisition and budgeted exploration and development expenditures. Mineral property acquisition costs are expensed as incurred if the criteria for capitalization are not met. In the event that mineral property acquisition costs are paid with Company shares, those shares are recorded at the estimated fair value at the time the shares are due in accordance with the terms of the property agreements.

Mineral property exploration costs are expensed as incurred.

When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves and pre-feasibility, the costs incurred to develop such property are capitalized.

Estimated future removal and site restoration costs, when determinable are provided over the life of proven reserves on a units-of-production basis. Costs, which include production equipment removal and environmental remediation, are estimated each period by management based on current regulations, actual expenses incurred, and technology and industry standards. Any charge is included in exploration expense or the provision for depletion and depreciation during the period and the actual restoration expenditures are charged to the accumulated provision amounts as incurred.

As of the date of these financial statements, the Company has incurred only property option payments and exploration costs which have been expensed.

To date the Company has not established any proven or probable reserves on its mineral properties.

Asset Retirement Obligations
The Company has adopted the provisions of FASB ASC 410-20 “Asset Retirement and Environmental Obligations,” which establishes standards for the initial measurement and subsequent accounting for obligations associated with the sale, abandonment or other disposal of long-lived tangible assets arising from the acquisition, construction or development and for normal operations of such assets. The adoption of this standard has had no effect on the Company’s financial position or results of operations. As of May 31, 2011, any potential costs relating to the ultimate disposition of the Company’s mineral property interests are not yet determinable.

36



SONO RESOURCES, INC.
(formerly Geneva Resources Inc.)
(An exploration stage company)
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2011 (Audited)
 
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes
The Company follows the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax balances. Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment. As at May 31, 2011, the Company had net operating loss carryforwards, however, due to the uncertainty of realization, the Company has provided a full valuation allowance for the deferred tax assets resulting from these loss carryforwards. Deferred income taxes are reported for timing differences between items of income or expense reported in the financial statements and those reported for income tax purposes in accordance with FASB ASC 740-10, “Income Taxes,” which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for tax loss and credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not.

Cash and cash equivalents
Cash and cash equivalents include highly liquid investments with original maturities of three months or less.

Available For Sale Securities
The Company’s holdings in marketable securities classified as available-for-sale are carried at fair value. The carrying value of marketable securities is reviewed each reporting period for declines in value that are considered to be other-than temporary and, if appropriate, the investments are written down to their estimated fair value. Realized gains and losses and declines in value judged to be other-than-temporary on available for sale securities are included in the Company’s statements of operations. Unrealized gains and unrealized losses deemed temporary are included in accumulated other comprehensive income (loss).

As of May 31, 2011, the Company has no shares classified as available for sale securities. During the year ended May 31, 2010 the Company sold all of the shares previously classified as available for sale for net proceeds to the Company of $54,810 and realized a loss of $215,190.

Net Income (Loss) per Share
The Company computes income (loss) per share in accordance with FASB ASC 260-10, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.

37



SONO RESOURCES, INC.
(formerly Geneva Resources Inc.)
(An exploration stage company)
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2011 (Audited)
 
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Foreign Currency Translation
The financial statements are presented in United States dollars. In accordance with FASB ASC 830-10, “Foreign Currency Matters,” foreign denominated monetary assets and liabilities are translated to their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Revenue and expenses are translated at average rates of exchange during the period. Related translation adjustments are reported as a separate component of stockholders’ equity, whereas gains or losses resulting from foreign currency transactions are included in results of operations. At May 31, 2011, the Company has not recorded any translation adjustments into stockholders’ equity.

Stock-based Compensation
On June 1, 2006, the Company adopted FASB ASC 718-10, “Compensation-Stock Compensation”, under this method, compensation cost recognized for the year ended May 31, 2007 includes: a) compensation cost for all share-based payments granted prior to, but not yet vested as of May 31, 2006, based on the grant-date fair value estimated in accordance with the original provisions of SFAS 123, and b) compensation cost for all share-based payments granted subsequent to May 31, 2006, based on the grant-date fair value estimated in accordance with the provisions of FASB ASC 718-10. In addition, deferred stock compensation related to non-vested options is required to be eliminated against additional paid-in capital upon adoption of FASB ASC 718-10. The results for the prior periods were not restated.

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 505-50 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.

Fair Value of Financial Instruments
In accordance with the requirements of FASB ASC 820-10, the Company has determined the estimated fair value of financial instruments using available market information and appropriate valuation methodologies. The fair value of financial instruments classified as current assets or liabilities approximate their carrying value due to the short-term maturity of the instruments.

38



SONO RESOURCES, INC.
(formerly Geneva Resources Inc.)
(An exploration stage company)
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2011 (Audited)
 
 
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recently Issued Accounting Pronouncements
In January 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2010-6, “Improving Disclosures about Fair Value Measurements.” This update requires additional disclosure within the roll forward of activity for assets and liabilities measured at fair value on a recurring basis, including transfers of assets and liabilities between Level 1 and Level 2 of the fair value hierarchy and the separate presentation of purchases, sales, issuances and settlements of assets and liabilities within Level 3 of the fair value hierarchy. In addition, the update requires enhanced disclosures of the valuation techniques and inputs used in the fair value measurements within Levels 2 and 3. The new disclosure requirements are effective for interim and annual periods beginning after December 15, 2009, except for the disclosure of purchases, sales, issuances and settlements of Level 3 measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010. As ASU 2010-6 only requires enhanced disclosures, the Company does not expect that the adoption of this update will have a material effect on the Company’s financial position, results of operations or cash flows.

In December 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-28 (ASU 2010-28), Intangibles, Goodwill and Other. The amendments in this Update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. The Company does not expect the provisions of ASU 2010-28 to have a material effect on the Company’s financial position, results of operations or cash flows.

NOTE 3 –MINERAL EXPLORATION PROPERTIES

(a) Vilcoro Gold Property
On February 23, 2007, the Company entered into a Property Option Agreement with St. Elias Mines Ltd., (“St. Elias”) a publicly traded company on the TSX-V exchange, to acquire not less than an undivided 66% legal, beneficial and registerable interest in certain mining leases in Peru comprised of approximately 600 hectares in Peru.

On December 1, 2007, the Company entered into an extension agreement with St. Elias (the “December Extension Agreement”). The December Extension Agreement (i) acknowledged that in accordance with the terms and provisions of the Property Option Agreement, the Company must incur and pay exploration expenditures of not less than $500,000 prior to January 17, 2008, and (ii) provided an extension until March 31, 2008 to incur and pay such Exploration Expenditures. On June 4, 2008, an indefinite extension was granted by St. Elias to pay such Exploration Expenditures, based on the Operator’s work on schedule.

Under the terms of the Property Option Agreement, and in order to exercise its Option to acquire the properties, the Company was required to make the following non-refundable cash payments to St. Elias totaling $350,000 in the following manner:

  1.

Payment of $50,000 in cash (paid).

  2.

The second payment of $100,000 in cash and issuance of 12,500 shares of the Company’s common stock were due on or before the twelve month anniversary of the signing of the Property Option Agreement (paid and issued).

  3.

The third payment of $200,000 in cash was due on or before the twenty fourth month anniversary of the signing of the Property Option Agreement.

39



SONO RESOURCES, INC.
(formerly Geneva Resources Inc.)
(An exploration stage company)
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2011 (Audited)
 
 
NOTE 3 –MINERAL EXPLORATION PROPERTIES (continued)

a) Vilcoro Gold Property (continued)
The Company was also required to incur costs totaling $2,500,000 as follows:

  1.

expenditures of $500,000 were to be incurred on or before the twelve month anniversary (subsequently indefinitely extended as described above) of the signing of the Property Option Agreement. ($551,000 was incurred from the inception of the agreement through May 31, 2009;

  2.

expenditures of $750,000 were to be incurred on or before the twenty-fourth-month anniversary (subsequently indefinitely extended as described above) of the signing of the Property Option Agreement; and

  3.

expenditures of $1,250,000 were to be incurred on or before the thirty-sixth-month anniversary (subsequently indefinitely extended as described above) of the signing of the Property Option Agreement.

Also under the terms of the Property Option Agreement, St. Elias would be the operator of the properties and would receive an 8% operator fee on all exploration expenditures. Once the Company exercised the Option defined above, the Company agreed to pay 100% of all ongoing exploration, development and production costs until commercial production and the Company had the right to receive 100% of any cash flow from commercial production of the properties until it had recouped its production costs, after which the cash flow would be allocated 66% to the Company and 34% to St. Elias.

On November 10, 2008, the Company commenced legal proceedings in the Supreme Court of British Columbia, Canada against each of St. Elias and John Brophy P. Geol. The Company sought rescission of the Property Option Agreement and the return of all funds and shares advanced by the Company to St. Elias. The Company alleged that St. Elias failed to properly discharge its duty as an operator of the Vilcoro Property and also alleged that each of St. Elias and John Brophy failed to provide the Company complete and accurate information relating to the ownership of the Vilcoro Property and to the ownership of the adjacent property, including failing to disclose that John Brophy and his wife had an interest in the Vilcoro Property and the adjacent property. The Company also alleged that St. Elias used some of the exploration funds provided by the Company to fund the exploration of the adjoining property.

A statement of Defense was filed by St. Elias and John Brophy on December 23, 2008, denying the majority of the allegations made by the Company. In addition St. Elias and John Brophy also filed a counter claim against the Company for abuse of process and punitive damages.

On May 5, 2010, the Company entered into a mutual release with St. Elias pursuant to which St. Elias and the Company agreed to release one another from all causes of action, claims and demands of any nature of kind whatsoever arising out of or in any way related to any of the subject matter of the Statement of Claim. As part of the mutual release St. Elias agreed to return the 12,500 shares of common stock previously issued to the Company. Accordingly, during the year ended May 31, 2010, the related acquisition costs totaling $165,010 were written off to loss on option deposit. On July 12, 2010, the 12,500 shares were returned to treasury and cancelled with the estimated fair value of $2,000 being recorded as legal settlement during the year.

During fiscal 2009, the Company recorded a mineral property recovery of $50,000 in connection with the return of funds originally paid into trust to fund exploration activities.

40



SONO RESOURCES, INC.
(formerly Geneva Resources Inc.)
(An exploration stage company)
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2011 (Audited)
 
NOTE 3 –MINERAL EXPLORATION PROPERTIES (continued)

(b) San Juan Property
On November 16, 2006, the Company entered into a Property Option Agreement with Petaquilla Minerals Ltd (“Petaquilla”). Petaquilla therein granted the Company the sole and exclusive option to acquire up to a 70% undivided interest in and to five exploration concessions situated in the Republic of Panama owned and controlled by Petaquilla’s wholly-owned subsidiary.

During 2007, certain disputes arose between the Company and Petaquilla which were resolved during 2008 by way of a settlement agreement (the “Settlement”), mutual release and the ultimate termination of the original option agreement. Pursuant to the terms of the Settlement: (i) Petaquilla issued 100,000 shares of its common stock to the Company, subject to pooling and release in four equal monthly tranches commencing no later than December 31, 2008 and certain other conditions, (ii) the 1,000,000 shares of the restricted common stock previously issued by the Company to Petaquilla were returned to the Company; and (iii) the $100,000 previously paid by the Company in order to exercise the initial portion of the Option were returned to the Company.

As of May 31, 2008, the Company had received $100,000 and the return of the 1,000,000 restricted shares of the Company’s common stock with an estimated fair value of $5,440,000. In addition, the Company recorded the 100,000 common shares of Petaquilla, with an estimated fair value of $270,000, as accounts receivable as of May 31, 2008. The total proceeds of $5,810,000 was included in amounts recorded as gain on settlements during 2008.

During fiscal 2009, the Company received the 100,000 common shares receivable from Petaquilla, previously valued at $270,000. As of May 31, 2009, the 100,000 shares received had an estimated fair value of $55,000 ($0.55 per share). During 2010 the Company sold the shares for net proceeds to the Company of $54,810 for a loss on disposal of $215,190.

(c) Amelia and San Martin Concessions
On November 20, 2009, the Company entered into a Letter Agreement with Glenn Patrick Schmitz (“Optionor”) in connection with the proposed acquisition of an 80% interest in 39 mineral concessions located near Domyeko in Chile. The parties agreed to complete their due diligence and the execution of a Formal Agreement within 60 days of the execution of the Letter Agreement. The material terms and conditions (based on successful due diligence as defined) set out in the term sheet were as follows:

  1.

The Company was to pay the Optionor $5,000 upon the parties execution of the Letter Agreement. Funds were paid on November 23, 2009.

  2.

The Company would transfer and deliver 500,000 restricted common shares in the capital stock of the Company to the Optionor as follows: 125,000 shares as the initial tranche within thirty days of the Formal Agreement date; 250,000 shares upon the expiry of the first twelve month period after the Formal Agreement date; and 125,000 shares upon the expiry of the second twelve month period after the Formal Agreement date.

  3.

The Company would pay the Optionor further amounts as follows: $300,000 prior to the first anniversary of the Formal Agreement date; an amount to be solely and exclusively determined by the Company in its judgment, based on the First Year Term drilling and exploration results, would be paid as Exploration Expenditures by the Company prior to the Second Anniversary; and an amount to be solely and exclusively determined by the Company in its judgment, based on the Second Year Term drilling and explorations results, would be paid as Exploration Expenditures by the Company prior to the Third Anniversary.

Based on the results of the due diligence, the Company decided not to proceed with this proposed acquisition and made a request for a refund of the $5,000 deposit. As of May 31, 2010, the $5,000 was written off to loss on option deposit based on uncertainty as to collection.

41



SONO RESOURCES, INC.
(formerly Geneva Resources Inc.)
(An exploration stage company)
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2011 (Audited)
 
NOTE 3 –MINERAL EXPLORATION PROPERTIES (continued)

(d) Botswana leases
On March 14, 2011 the Company entered into a formal Share Purchase Agreement (the “Agreement”) with Tignish (PTY) Ltd., a Botswana company (the “Vendor”), to purchase 95 percent of the issued and outstanding shares (the “Shares”) of Bonnyridge (PTY) Ltd., also a Botswana company (“Bonnyridge”), which is the legal and beneficial owner of three mineral license blocks located in Northwestern Botswana, Africa (the “Property”).

In accordance with the terms of the Agreement, and in order to purchase the Shares, the Company was required to provide the Vendor with: (i) an initial cash payment of $200,000 by April 20, 2011 (paid); (ii) a further cash payment of $100,000 on or before closing; and (iii) 6,500,000 restricted common shares of the Company at closing; and which closing was required to occur prior to April 29, 2011 unless otherwise mutually determined. The closing date was subsequently extended to provide adequate time to obtain final regulatory approvals in Botswana. These regulatory approvals were obtained on July 22, 2011. The further cash payment of $100,000 was paid on July 29, 2011 and the 6,500,000 restricted common shares of the Company were issued to the Vendor on August 2, 2011.

In order to maintain its property interests, Bonnyridge continues to be obligated to provide the Vendor with $900,000 payable in three instalments of $300,000 per year over a three-year period. The two cash payments made by the Company to the Vendor of $200,000 and $100,000 respectively noted above, will be applied against the $300,000 instalment due for the first year. In addition, the Company must carry out an exploration program on the 2,965.6 square km of mineral rights with an expenditure commitment over the three-year period of $1,750,000.

NOTE 4 – STOCKHOLDERS’ DEFICIT

The Company’s capitalization is 50,000,000 common shares with a par value of $0.001 per share.

On May 1, 2006, a majority of shareholders and the directors of the Company approved a special resolution to undertake a forward stock split of the common stock of the Company on a 42 new shares for 1 old share basis. On October 13, 2006, a majority of the Board of Directors approved by way of a stock dividend to undertake a forward stock split of the common stock of the Company on a 4 new shares for 1 old share basis. On February 1, 2010, a majority of the Board of Directors approved by way of a stock dividend to undertake a reverse stock split of the common stock of the Company on a 1 new shares for 4 old share basis which was effected on June 18, 2010, decreasing the then outstanding shares from 104,743,062 to 26,185,778.

All references in these financial statements to number of common shares, price per share and weighted average number of common shares outstanding prior to the 42:1 forward split and the 4:1 forward split and the 1:4 to reverse split have been adjusted to reflect these stock splits on a retroactive basis, unless otherwise noted.

On September 27, 2006, four founding shareholders returned 7,500,000 of their restricted founders’ shares, previously issued at prices ranging from $0.0016 - $0.009 per share, to treasury and the shares were subsequently cancelled by the Company. The shares were returned to treasury for no consideration to the founding shareholders.

On December 1, 2006, the Company issued 1,000,000 common shares valued at $7,400,000 in connection with the San Juan Property Option Agreement.

42



SONO RESOURCES, INC.
(formerly Geneva Resources Inc.)
(An exploration stage company)
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2011 (Audited)
 
NOTE 4 – STOCKHOLDERS’ DEFICIT (continued)

In August 2007, the Company received $400,000 towards a planned private placement of Units to be offered at $4.00 per unit with each unit consisting of one common share and one warrant to acquire an additional common share, exercisable at $6.00 for twelve months. On February 29, 2008, the Company changed the terms of the planned private placement of Units now to be offered at $1.00 per unit with each unit consisting of one common share only. The 100,000 shares were issued on September 9, 2008.

On October 15, 2007, the Company issued 2,500 common shares with a fair value of $15,000 as a finder’s fee payment in connection with the Vilcoro Gold Property Option Agreement.

On January 31, 2008, the Company issued 12,500 common shares to St. Elias Mines Ltd. with a fair value of $65,000 in connection with the Vilcoro Gold Property Option Agreement (Refer Note 3a).

On March 14, 2008, the Company returned to treasury the 1,000,000 common shares with a fair value of $5,440,000 in connection with the settlement with Petaquilla (Refer to Note 3b).

On May 29, 2008, the Company issued 21,625 common shares at $5.00 per share totaling $108,125, in settlement of $86,500 in debt owed by the Company to the president of the Company, resulting in a $21,625 loss on the debt settlement.

On May 29, 2008, the Company issued 197,590 common shares at $5.00 per share totaling $987,953, in settlement of $790,362 in debt owed by the Company to a supplier of the Company, resulting in a $197,591 loss on the debt settlement.

On September 9, 2008, the Company issued 100,000 common shares at $4.00 per share for proceeds of $400,000 which were received during the year ended May 31, 2008.

In September and October 2009, the Company received $350,000 towards a planned private placement of Units to be offered at $0.20 per unit with each unit consisting of one common share and one warrant to acquire an additional common share, exercisable at $1.00 for twelve months. On December 8, 2009, the Company issued 1,750,000 common shares at $0.20 per share in connection with these previously received share subscriptions.

Effective December 7, 2009, the Board of Directors of the Company authorized the issuance of an aggregate of 14,801,562 shares of the Company’s Common Stock in settlement of a total of $1,776,186 at $0.12 per share. In connection with the conversion of the promissory note, we recognized a beneficial conversion feature of $592,062 which was charged to Additional Paid-in Capital. (refer to Note 6).

On February 1, 2010, a majority of the Board of Directors approved by way of a stock dividend to undertake a reverse stock split of the common stock of the Company on a 1 new shares for 4 old share basis, effectuated on June 18, 2010, decreasing outstanding shares from 104,743,062 to 26,185,778.

On July 12, 2010, the Company returned to treasury and cancelled the 12,500 common shares with an estimated fair value of $2,000 in connection with the settlement with St. Elias (Refer to Note 3a).

43



SONO RESOURCES, INC.
(formerly Geneva Resources Inc.)
(An exploration stage company)
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2011 (Audited)
 
NOTE 5 – STOCK OPTION PLAN

On May 9, 2007, the Board of Directors of the Company ratified, approved and adopted a Stock Option Plan for the Company in the amount of 1,250,000 shares with an exercisable period up to 10 years. In the event an optionee ceases to be employed by or to provide services to the Company for reasons other than cause, any Stock Option that is vested and held by such optionee may be exercisable within up to ninety calendar days after the effective date that his position ceases. No Stock Option granted under the Stock Option Plan is transferable. Any Stock Option held by an optionee at the time of his death may be exercised by his estate within one year of his death or such longer period as the Board of Directors may determine.

On May 9, 2007, the Company granted 375,000 stock options to officers, directors and consultants of the Company at $4.00 per share. The term of these options are ten years. The total fair value of these options at the date of grant was $965,671, and was estimated using the Black-Scholes option pricing model with an expected life of 10 years, a risk free interest rate of 4.49%, a dividend yield of 0% and expected volatility of 164% and was recorded as stock based compensation expense during the year ended May 31, 2007.

On April 28, 2008, the Company granted 87,500 stock options to a director of the Company at $4.80 per share. The term of these options are ten years. The total fair value of these options at the date of grant was $388,500 and was estimated using the Black-Scholes option pricing model with an expected life of 10 years, a risk free interest rate of 3.86%, a dividend yield of 0% and expected volatility of 126% and was recorded as a stock based compensation expense during the year ended May 31, 2008.

A summary of the Company’s stock options as of May 31, 2011, and changes during the year then ended is presented below:

    Number of     Weighted average     Weighted average remaining  
    Options     exercise     Contractual life  
          Price per share     (in years)  
                   
Outstanding at May 31, 2009   462,500   $  4.15     8.12  
Granted during the year   -     -     -  
Exercised during the year   -     -     -  
                   
Outstanding at May 31, 2010   462,500     4.15     7.12  
Granted during the period   -     -     -  
Exercised during the period   -     -     -  
Cancelled during the year   (462,500 )   4.15     -  
                   
Outstanding at May 31, 2011   -     -     -  

NOTE 6 – SHAREHOLDERS’ LOANS

On November 14, 2006, a significant shareholder of the Company advanced $100,000 on behalf of the Company regarding a previous property option agreement. Additional advances of $303,500, $795,000 and $540,000 were received during the years ended May 31, 2007, 2008 and 2009, respectively under the same terms and conditions. During the period ended December 1, 2009, an additional $25,904 was advanced by the same shareholder leaving an amount owing as of December 1, 2009 of $1,764,404 and $11,782 in interest (May 31, 2009 - $1,987,899). These amounts were unsecured, bear interest at 10% per annum, and have no set terms for repayment.

44



SONO RESOURCES, INC.
(formerly Geneva Resources Inc.)
(An exploration stage company)
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2011 (Audited)
 
NOTE 6 – SHAREHOLDER’S LOAN (continued)

Effective December 7, 2009, the Board of Directors of the Company authorized the settlement of the remaining outstanding advances and accrued interest aggregating to $1,776,186. This Debt was evidenced by a demand convertible promissory note dated December 1, 2009 in the principal amount of $1,776,186 issued to the above significant shareholder. In accordance with the terms and provisions of the Promissory Note, in the event the Company was unable to repay the debt, the debt could be satisfied by way of conversion of the debt into shares of the Company’s restricted common stock at $0.12 per share. Subsequently the shareholder assigned a proportionate right of its title and interest in and to the debt and the convertible promissory note to certain Assignees. On December 7, 2009, the Company received notices of conversion from the respective Assignees, pursuant to which the Board of Directors of the Company authorized the issuance of an aggregate of 14,801,562 shares of the Company’s Common Stock proportionately to the Assignees in settlement of the $1,776,186 at the rate of $0.12 per share. In connection with the Convertible Promissory Note, the Company recognized a beneficial conversion feature of $592,062 which was charged to Additional Paid-in Capital.

During the year ended May 31, 2011 two shareholders advanced the Company $322,500 (net of repayments of $5,000). These amounts were unsecured, bear interest at 5% per annum and have a two year term. Interest and principal are due at the end of the term of the loan. As of May 31, 2011, a total of $326,745 in principal and accrued interest is due to the shareholders.

NOTE 7 – DUE FROM RELATED COMPANY

During the year the Company advanced $6,000 to Morgan Creek Energy Corp., a company with certain directors in common with the Company. These advances are non-interest bearing, unsecured and without specific terms or repayment.

NOTE 8 – INCOME TAXES

The Company has adopted the FASB ASC 740-10 for reporting purposes. As of May 31, 201 and May 31, 2010, the Company had net operating loss carry forwards of approximately $6,540,000 and $6,210,000 respectively that may be available to reduce future years’ taxable income through 2029. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carryforwards.

The applicable federal and state statutory tax rates used in determining the Company’s income tax provisions deferred tax asset are as follows:

                                                                                                                                                                2011          2010  
             
Federal income tax provision at statutory rate   35.0%     35.0%  
States income tax provision at statutory rates, net of federal income tax effect   0.0%     0.0%  
             
Total income tax provision   35.0%     35.0%  

45



SONO RESOURCES, INC.
(formerly Geneva Resources Inc.)
(An exploration stage company)
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2011 (Audited)
 
NOTE 8 – INCOME TAXES (continued)

The actual income tax provisions differ from the expected amounts calculated by applying the combined federal and state corporate income tax rates to the Company’s loss before income taxes. The components of these differences are as follows:

    2011     2010  
Federal net operating loss $  (330,570 ) $  (1,327,789 )
Corporate tax rate   35%     35%  
Expected tax recovery (expense)   115,699     464,726  
Less:            
   Non-deductible interest related to note conversion   -     (207,222 )
   Change in valuation allowance   (115,699 )   (257,504 )
Future income tax provision $  -   $  -  

The Company’s deferred tax assets are as follows:

    2011     2010  
Deferred tax assets            
   Net operating loss carry forwards $  2,290,031   $  2,174,332  
Total deferred tax assets   2,290,031     2,174,332  
Valuation allowance   (2,290,031 )   (2,174,332 )
Net deferred tax assets $  -   $  -  

The valuation allowance for deferred tax assets as of May 31, 2011 and May 31, 2010 was $2,290,031 and $2,174,332, respectively. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would be realized as of May 31, 2011 and May 31, 2010.

46



SONO RESOURCES, INC.
(formerly Geneva Resources Inc.)
(An exploration stage company)
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2011 (Audited)
 
NOTE 9 – LEGAL PROCEEDINGS

On October 26, 2009, Stacey Kivel, former president of the Company filed a lawsuit of wrongful dismissal in the State of Nevada. During July 2007, we terminated the employment of Stacey Kivel, our then President, for cause. Subsequently, Ms. Kivel made certain false allegations against us. We refuted her allegations and believed termination was justified. On October 13, 2010 all parties agreed to a settlement to which the Company agreed to pay Ms. Kivel, $40,000 (paid on October 27, 2010).

On May 5, 2010, we entered into that certain mutual release with St. Elias (the “Mutual Release”) pursuant to which we and St. Elias agreed to release one another from all causes of action, claims and demands of any nature or kind whatsoever arising out of or in any way related to any of the subject matter of the Statement of Claim. On July 12, 2010, 12,500 common stock shares were returned treasury with an estimated fair value of $2,000, thus reducing our total issued and outstanding to 26,173,278 shares of common stock.

NOTE 10 – SUBSEQUENT EVENTS

Botswana leases (see Note 3(d))

Effective July 25, 2011, we completed the acquisition from Tignish of 95% of the issued and outstanding shares of Bonnyridge, which is the legal and beneficial owner of three mineral license blocks located in northwestern Botswana, Africa. Both Tignish and Bonnyridge are companies incorporated under the laws of Botswana. Tignish was the registered and beneficial owner of 950 common shares of Bonnyridge (the “Purchased Shares”), representing 95% of the issued and outstanding shares of Bonnyridge. Pursuant to the Share Purchase Agreement, as amended Tignish has sold, and the Company has purchased, the Purchased Shares for the following consideration: (i) an initial cash payment of US$200,000 ( paid April 20, 2011); (ii) a further cash payment of US$100,000 ( paid July 29, 2011); and (iii) 6,500,000 restricted common shares of the Company ( issued July 31, 2011). The Share Purchase Agreement as amended on July 22, 2011, eliminated the requirement for an exploration expenditure commitment over a three year period of $1,750,000 on Bonnyridge's 2,965.6 square km of mineral rights.

Effective on August 11, 2011, we entered into an agreement in principle to acquire the remaining 5% of the shares of Bonnyridge Pty to hold 100% of the shares.

Under its prior and recently completed purchase agreement Sono acquired 95% of Bonnyridge. Sono was required to pay $900,000 in cash over a three-year period and issue 6.5 million shares to the then share vendors; of which $300,000 had been paid and all said shares had been issued.

Sono has now acquired the remaining 5% Shares by paying $100,000 in cash (paid September 7, 2011) and issuing 1,000,000 additional shares from treasury; thereby also eliminating the additional cash payments of $600,000, which had been required under its prior purchase agreement for Sono.

47



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

We have had no disagreements with our principal independent accountants.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of May 31, 2011, which is the end of the fiscal period covered by this Annual Report, our Chief Executive Officer and our Chief Financial Officer reviewed and evaluated the effectiveness of our disclosure controls and procedures, as defined in Exchange Act Rule 13a-15(e) and 15d-15(e). Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of May 31, 2011.

Management's Annual Report On Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we evaluated the effectiveness of our internal control over financial reporting as of May 31, 2011. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework.

Based upon this assessment, we determined that our internal control over financial reporting as of May 31, 2011 was not effective.

Management identified the following material weakness in internal control over financial reporting: the Company does not maintain an adequate purchasing/accounts payable system. Management has resolved this weakness by instituting improved and timely monthly reconciliations of accounts payables as well as improving the management review process to ensure any adjustments are identified and recorded in a timely basis.

This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the company to provide only management's report.

Changes in Internal Controls

There have been no changes in our internal control over financial reporting during our fourth fiscal quarter of our fiscal year ended May 31, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

Not applicable.

48



ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Our executive officers and directors and their respective ages as of the date of this prospectus are as follows:

Name Age Position Held
Peter Wilson 43 President, Chief Executive Officer and Director
William D. Thomas 60 Chief Financial Officer and Director
Paul Robert Lindsay 57 Director
Angelo Viard 35 Director
Luc Antoine 58 Director

The following describes the business experience of each of our directors and executive officers, including other directorships held in reporting companies:

Peter Wilson. Mr. Wilson has been our President, Chief Executive Officer and a member of our Board of Directors since April 5, 2011. During the past 20 years, Mr. Wilson has been involved in senior level management of public companies through his private investment firm which is based in Vancouver, Canada. His experience spans a wide range of project finance, development and contract negotiations within the mining, energy and real estate industries. His business experience includes international assignments in the United Kingdom, Canada, the United States, Switzerland and Norway. From December 3, 2009 to present, Mr. Wilson has served as Vice President of Business Development and a member of the Board of Directors of Mainland Resources, Inc., a reporting company quoted on the OTC Bulletin Board. From September 2008 to present, Mr. Wilson has served as the President/Chief Executive Officer and a director of Morgan Creek Energy Corp., a reporting company quoted on the OTC Bulletin Board. From April 2007 through October 2009, Mr. Wilson was the president and a director of Hana Mining Ltd., a publicly TSX-V listed exploration company seeking to develop a copper-silver resource in Botswana, Africa. Additionally, during 2005 and 2006, he served as the president and chief executive officer of Sun Oil and Gas Corp.

William D. Thomas. Mr. Thomas has been our Chief Financial Officer and a member of our Board of Directors since April 5, 2011. Mr. Thomas has over thirty years of experience in the finance and accounting areas for the natural resource sector. Mr. Thomas has served as Chief Financial Officer, Secretary and Treasurer of Mainland Resources, Inc., a reporting company quoted on the OTC Bulletin Board, from July 2008 through September 2009 and from March 2010 to the present. In addition, Mr. Thomas has served as a director of Mainland Resources since September 2009. From August 2008 to present, Mr. Thomas has served as Chief Financial Officer, Secretary, Treasurer and a director of Mercer Gold Corp., a reporting company quoted on the OTC Bulletin Board. From January 2009 to present, Mr. Thomas has served as Chief Financial Officer, Secretary and Treasurer of Morgan Creek Energy, Inc., a reporting company quoted on the OTC Bulletin Board. In July 2007 Mr. Thomas took on the role of Chief Financial Officer for two public resource companies; Hana Mining Inc. (TSX-V: HMG) and NWT Uranium Corp (TSX-V: NWT; OTCBB: NWURF). Mr. Thomas resigned from NWT Uranium Corp. and Hana Mining Inc in July 2008 and March 2010, respectively. Mr. Thomas held various successive management positions with Kerr McGee Corporation’s China operations based in Beijing, China, ending in 2004 with his final position as Director of Business Services. For a brief period after leaving Kerr McGee, Mr. Thomas acted as a self-practitioner in the accounting and finance field.

Mr. Thomas attained his Chartered Accountant (CA) designation from the Canadian Institute of Chartered Accountants in 1977. He holds an Honors Bachelor of Commerce and Finance from the University of Toronto, Ontario, Canada.

Paul Robert Lindsay. Mr. Lindsay has been a member of our Board of Directors since April 5, 2011. Mr. Lindsay has over 33 years of mineral and mining experience, focused on management and mine development. He has experience in both underground and surface mining and development of flat and decline mining operations. He is a specialist in development and construction and has a long history with Managing Civil & Mechanical Construction on surface and underground, as well as environmental management working towards I.S.O 14001 accreditation.

49


Mr. Lindsay was most recently a mining consultant to Koidu Holdings from January 2010 until present. He was the Mining Manager at the Geita Gold Mine operated by Anglo Gold Ashanti in Tanzania from 2007 to 2010 and was also the Mining Manager at their Yatela Gold Mine in Mali during that time. He was the Senior Mining Engineer for De Beers’ Venetia Mine in South Africa (1997-2007) and the Mine Overseer at De Beers’ Finsch Mine, also located in South Africa (1981 to 1997).

A resident of South Africa, Mr. Lindsay is an Associate Member of the South African Institute of Mining & Metallurgy and Fellow Member of the Institute of Quarrying.

Angelo Viard. Angelo Viard has been a member of our Board of Directors since December 11, 2009. During the past ten years, Mr. Viard has been involved in providing companies with advisory services including, but not limited to, managerial, investment strategy, finance, information technology, compliance, accounting, business development, mergers and acquisitions, and capital fund raising in a wide range of industry sectors across the United States, South America and Europe. From approximately June 2007 through current date, Mr. Viard has been the president/chief executive officer of VCS Group, Inc. formerly known as “Viard Consulting Services”. His role as director of advisory services requires development of an advisory services sector. Mr. Viard’s functions include full budgeting responsibilities, management of budgets and planning, creation of policies and administrative procedures to restructure business processes, authoring multi-company employee manuals, design work order tracking and billing interface systems for accounting, and updating business plans, accounting structures and organizational changes to maximize business growth. From approximately August 2006 through June 2007, Mr. Viard was the IT operations manager for Bare Escentuals where he was responsible for developing and coordinating multiple related projects in alignment with strategic and tactical company goals, served as a primary customer advocate, planned and coordinated long term systems strategy, and managed the day to day operations of the IT department, including LAN/WAN architecture, telecommunications and hardware/software support and development. From approximately August 2005 through August 2006, Mr. Viard was a senior IT audit consultant for PricewaterhouseCoopers LLP where he was responsible for determining the audit documentation, strategy and plan. From approximately December 2004 through August 2005, Mr. Viard was the chief executive officer and founder of Technology Mondial Inc., which was a start-up company specializing in broadband wireless technology in Costa Rica and management and development of wireless connection planning for Latin America. Mr. Viard was also previously employed with OpenTV Inc, where he was manager of information system and technology, Thomas Weisel Partners LLC where he was an information technology brokerage services manager, BancBoston Robertson Stephens & Co. where he was a senior system engineer, and Environmental Chemical Corporation where he was a technical analyst.

Mr. Viard is also a member of the Board of Directors of Morgan Creek Energy Corp., and Mainland Resources Inc. Both companies traded on the Over-the-Counter Bulletin Board. Mr. Viard holds a master in computer science, a BS in business management and administration, and an A/A in computer business administration and network.

Luc Antoine. Luc Antoine has been a member of our Board of Directors since May 31, 2011. Dr. Antoine is a professional geologist and geophysicist who has worked on the African continent in such countries as Algeria, Libya, Tanzania, Sudan, Mozambique, South Africa, Angola, Congo, Gabon, Mauritania, Senegal, Morocco and Botswana for over 20 years. His expertise is focused on exploration, data security and quality control, data acquisition, and on data interpretation.

Dr. Antoine is co-founder and technical director of GeX Surveys, a company specializing in airborne geophysical data acquisition contracting services since 2006. He is also co-founder and technical director of Geoscientific Exploration Services, a company offering geological, geotechnical, remote sensing and geophysical consulting and contracting services since 1999.

During his career, Dr. Antoine has been extensively involved in developing exploration programmes for leading mining and mineral companies including Anglo American Gold Corporation (1986 to 1987) and Anglo American Gold’s base metals operations (1980 to 1986), as well as Falconbridge Exploration (1973 and 1978 to 1979). He also taught exploration methodology at the University of the Witwatersrand from 1987 to 2002.

50


A resident of South Africa, Dr. Antoine is an Associate Member of South African Geophysical Association (President 1993), a member of the Geological Society of South Africa, the European Association of Geoscientists and Engineers, and the Society of Exploration Geophysicists.

Term of Office

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.

Significant Employees

We have no significant employees other than the officers and directors described above.

Family Relationships

There are no family relationships among our directors or officers.

Involvement in Certain Legal Proceedings

To the best of our knowledge and belief, none of our directors or executive officers has been involved in any of the following events during the past ten years that is material to an evaluation of the ability of such person to serve as an executive officer or director of our Company:

  1.

a petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;

       
  2.

such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

       
  3.

such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:

       
  (i)

acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;

       
  (ii)

engaging in any type of business practice; or

       
  (iii)

engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;

       
  4.

such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph 3(i) above, or to be associated with persons engaged in any such activity;

51



  5.

such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

       
  6.

such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

       
  7.

such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

       
  (i)

any Federal or State securities or commodities law or regulation;

       
  (ii)

any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or

       
  (iii)

any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

       
  8.

such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the United States Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

We are not aware of any material legal proceedings in which any of the following persons is a party adverse to our Company or has a material interest adverse to our Company: (a) any current director, officer, or affiliate of the Company, or any owner of record or beneficial owner of more than five percent of any class of voting securities of the Company; (b) any person proposed for appointment or election as a director or officer of our Company; or (c) any associate of any such person.

Code of Ethics

We have adopted a Code of Ethics, which applies to our Board of Directors (we note that our officers are also directors). The text of our Code of Ethics is posted on our corporate website (www.sonoresourcesinc.com), and we undertake to provide any person without charge, upon request, a copy of our code of ethics, which may be requested by writing to us or calling us as follows:

Sono Resources, Inc.
2533 N. Carson Street, Suite 125
Carson City, Nevada 89706
Telephone: (775) 348-9330

Audit Committee

We do not have a separate Audit Committee. Our entire board of directors serves as our Audit Committee. We have not identified William Thomas as a financial expert serving on our board of directors/Audit Committee. However, because Mr. Thomas also serves as an officer of the Company, we do not consider him to be independent.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act requires our directors and officers, and the persons who beneficially own more than ten percent of our common stock, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Copies of all filed reports are required to be furnished to us pursuant to Rule 16a-3 promulgated under the Exchange Act. Based solely on the reports received by us and on the representations of the reporting persons, we believe that these persons have complied with all applicable filing requirements during the fiscal year ended May 31, 2011, except as follows:

52



Name Position Held Late or Unfiled Report
Peter Wilson President, Chief Executive Officer and Director Form 3 upon becoming director and officer filed late
William D. Thomas Chief Financial Officer and Director Form 3 upon becoming director and officer not filed
Paul Robert Lindsay Director Form 3 upon becoming director not filed
Angelo Viard Director N/A
Luc Antoine Director Form 3 upon becoming director not filed

ITEM 11. EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

The table below summarizes all compensation awarded to, earned by or paid to our executive officers by any person for all services rendered in all capacities to us during our fiscal years ended May 31, 2010 and 2011.

Summary Compensation Table

Name and Principal
Position
  Year     Salary
($)
    Bonus
($)
    Stock
Awards
($)
    Option
Awards
($)
    Non-
Equity
Incentive
Plan
Compen-
sation
($)
    Nonqualified
Deferred
Compen-
sation
Earnings
($)
    All
Other
Compen-
sation
($)
    Total
($)
 
Peter Wilson
President & Chief
Executive Officer


2010(1)
2011(1)
 
$
N/A
11,200




N/A
Nil




N/A
Nil




N/A
Nil




N/A
Nil




N/A
Nil




N/A
Nil



$
N/A
11,200


William Thomas
Chief Financial
Officer


2010(2)
2011(2)
 
$
N/A
2,240




N/A
Nil




N/A
Nil




N/A
Nil




N/A
Nil




N/A
Nil




N/A
Nil



$
N/A
2,240


Marcus Johnson
(Former) President,
Chief Executive
Officer and Chief
Financial Officer




2010(3)
2011(3)
 
$


Nil
35,000








Nil
Nil








Nil
Nil








Nil
Nil








Nil
Nil








Nil
Nil








Nil
Nil





$


Nil
35,000





(1)

Mr. Wilson was appointed as our President and Chief Executive Officer on April 5, 2011.

(2)

Mr. Thomas was appointed as our Chief Financial Officer on April 5, 2011.

(3)

Mr. Johnson resigned as our President, Chief Executive Officer and Chief Financial Officer on April 5, 2011.

Outstanding Equity Awards

As at May 31, 2011 there were no unexercised options, stock that had not vested or outstanding equity incentive plan awards with respect to any of our officers or directors.

53


Compensation of Directors

Except as disclosed below, we did not pay our directors any fees or other compensation for acting as directors during our fiscal year ended May 31, 2011. Certain of our current or former directors serve or have served as officers of the Company, and any compensation they received due to their service as an officer is disclosed in the table above and is not included in the table below.

  Director Compensation   




Name and Principal
Position


Fees earned
or paid in
cash
($)



Stock
Awards
($)



Option
Awards
($)
Non-Equity
Incentive
Plan
Compen-
sation
($)
Nonqualified
Deferred
Compen-
sation
Earnings
($)


All Other
Compen-
sation
($)




Total
($)
               
Marcus Johnson (1)(2) Nil Nil Nil Nil Nil Nil Nil
Peter Wilson(1) Nil Nil Nil Nil Nil Nil Nil
William Thomas(1) Nil Nil Nil Nil Nil Nil Nil
Paul Lindsay Nil Nil Nil Nil Nil Nil Nil
Angelo Viard Nil Nil Nil Nil Nil Nil Nil
Luc Antoine Nil Nil Nil Nil Nil Nil Nil

(1)

See summary compensation table above.

(2)

Mr. Johnson resigned as a director on April 5, 2011.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of the date of this annual report by: (i) each person (including any group) known to us to own more than 5% of any class of our voting securities, (ii) each of our directors, (iii) each of our officers and (iv) our officers and directors as a group. Each stockholder listed possesses sole voting and investment power with respect to the shares shown.


Title of class

Name and address of beneficial owner(1)
Amount and nature
of beneficial owner(2)
Percentage of
class(3)
Persons owning more than 5% of voting securities

Common Stock
Brian Hambleton Jones
South Africa

3,250,000

9.7%

Common Stock
Marc Paul Lindsay
South Africa

3,050,000

9.1%
Officers and Directors
Common Stock Peter Wilson 1,250,000 3.7%
Common Stock William D. Thomas Nil Nil
Common Stock Paul Robert Lindsay Nil Nil
Common Stock Angelo Viard Nil Nil
Common Stock Luc Antoine Nil Nil

54



Common Stock
All executive officers and directors as a
group (five persons)
1,250,000
3.7%

1.

The address of our officers and directors our Company’s address, which is Suite 125-2533 N. Carson Street, Carson City, Nevada 89706.

2.

Under Rule 13d-3 of the Exchange Act a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares: (i) voting power, which includes the power to vote or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights.

3.

Based on 33,673,278 shares of our common stock issued and outstanding as of September 13, 2011.

Changes in Control

We are unaware of any contract, or other arrangement or provision of our Articles, the operation of which may at any subsequent date result in a change in control of the Company.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

None of the following parties has, in the last two fiscal years, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us:

  1.

any of our directors or officers;

     
  2.

any person proposed as a nominee for election as a director;

     
  3.

any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding shares of common stock; or

     
  4.

any member of the immediate family (including spouse, parents, children, siblings and in-laws) of any of the above persons.


ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

De Joya Griffith & Company, LLC served as our independent registered public accounting firm and audited our financial statements for the fiscal years ended May 31, 2011 and 2010. Aggregate fees for professional services rendered to us by our auditor are set forth below:

    Year Ended     Year Ended  
    May 31, 2011     May 31, 2010  
Audit Fees $ 35,750   $ 32,000  
Audit-Related Fees   Nil     Nil  
Tax Fees   Nil     Nil  
All Other Fees   Nil     Nil  
Total $ 35,750   $ 32,000  

Audit Fees

Audit fees are the aggregate fees billed for professional services rendered by our independent auditors for the audit of our annual financial statements, the review of the financial statements included in each of our quarterly reports and services provided in connection with statutory and regulatory filings or engagements.

55


Audit Related Fees

Audit related fees are the aggregate fees billed by our independent auditors for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not described in the preceding category.

Tax Fees

Tax fees are billed by our independent auditors for tax compliance, tax advice and tax planning.

All Other Fees

All other fees include fees billed by our independent auditors for products or services other than as described in the immediately preceding three categories.

Policy on Pre-Approval of Services Performed by Independent Auditors

It is our Board of Directors’ policy to pre-approve all audit and permissible non-audit services performed by the independent auditors. We approved all services that our independent accountants provided to us in the past two fiscal years.

ITEM 15. EXHIBITS

The following exhibits are filed with this Annual Report on Form 10-K:

Exhibit  
Number Description of Exhibit
3.1

Articles of Incorporation(1)

3.2

Certificate of Change (11)

3.3

Bylaws(1)

3.4

Amended Bylaws (2)

3.5

Articles of Merger and Plan of Merger of Geneva Resources Inc. filed with the Nevada Secretary of State of February 10, 2011(10)

10.1

2007 Stock Incentive Plan of Geneva Resources, Inc. (9)

10.2

Letter Agreement with Atlantic Ltd. (1)

10.3

Mineral Property Option Agreement between War Eagle Mining Company Inc. and Revelstoke Industries Inc. dated October 20, 2006 (3)

10.4

San Juan Property Option Agreement between Petaquilla Minerals Ltd. and Revelstoke Industries Inc. dated November 16, 2006 (4)

10.5

Letter of Intent between Geneva Gold Corporation and St. Elias Mines Ltd. dated January 22, 2007 (5)

10.6

Vilcoro Property Option Agreement between ST. Elias Mines Ltd. and Geneva Gold Corporation dated January 22, 2007 (6)

10.7

Property Financing and Operating Agreement between Allied Minerals and Geneva Resources Inc. dated April 24, 2007 (7)

10.8

Executive Services Agreement between Geneva Resources Inc. and Stacey Kivel dated May 24, 2007 (8)

10.9

Mutual Release between Geneva Resources Inc. and St. Elias Mines Ltd. (12)

10.10

Share Purchase Agreement dated March 14, 2011(13)

10.11

Amending Agreement dated April 20, 2011(14)

10.12

Amending Agreement dated May 18, 2011(15)

10.13

Amending Agreement dated June 15, 2011(16)

10.14

Further Amending Agreement dated July 22, 2011 (17)

10.15

Agreement in Principle dated August 10, 2011(18)

31.1

Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act.

31.2

Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act

32.1

Certification of Chief Executive Officer and Chief Financial officer Under Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act.

56



(1)

Filed as an Exhibit to the Company’s Registration Statement on Form SB-1 filed with the SEC on February 17, 2005 and incorporated herein by this reference.

(2)

Filed as an Exhibit to the Company’s Quarterly Report on Form 10-QSB filed with the SEC on January 23, 2006 and incorporated herein by this reference.

(3)

Filed as an Exhibit to the Company’s Current Report on Form 8-K filed with the SEC on October 24, 2006 and incorporated herein by this reference.

(4)

Filed as an Exhibit to the Company’s Current Report on Form 8-K filed with the SEC on November 24, 2006 and incorporated herein by this reference.

(5)

Filed as an Exhibit to the Company’s Current Report on Form 8-K filed with the SEC on January 26, 2007 and incorporated herein by this reference.

(6)

Filed as an Exhibit to the Company’s Current Report on Form 8-K filed with the SEC on February 28, 2007 and incorporated herein by this reference.

(7)

Filed as an Exhibit to the Company’s Current Report on Form 8-K filed with the SEC on May 11, 2007 and incorporated herein by this reference.

(8)

Filed as an Exhibit to the Company’s Current Report on Form 8-K filed with the SEC on June 18, 2007 and incorporated herein by this reference.

(9)

Filed as an Exhibit to the Company’s Annual Report on Form 10-K filed with the SEC on September 15, 2009 and incorporated herein by this reference.

(10)

Filed as an Exhibit to the Company’s Current Report on Form 8-K filed with the SEC on March 15, 2011 an incorporated herein by this reference.

(11)

Filed as an Exhibit to the Company’s Current Report on Form 8-K filed with the SEC on June 18, 2010 and incorporated herein by this reference

(12)

Filed as an Exhibit to the Company’s Current Report on Form 8-K filed with the SEC on May 19, 2010 and incorporated herein by this reference

(13)

Filed as an Exhibit to the Company’s Current Report on Form 8-K filed with the SEC on April 7, 2011 an incorporated herein by this reference.

(14)

Filed as an Exhibit to the Company’s Current Report on Form 8-K filed with the SEC on April 29, 2011 an incorporated herein by this reference.

(15)

Filed as an Exhibit to the Company’s Current Report on Form 8-K filed with the SEC on May 25, 2011 an incorporated herein by this reference.

(16)

Filed as an Exhibit to the Company’s Current Report on Form 8-K filed with the SEC on June 21, 2011 an incorporated herein by this reference.

(17)

Filed as an Exhibit to the Company’s Current Report on Form 8-K filed with the SEC on July 27, 2011 an incorporated herein by this reference.

(18)

Filed as an Exhibit to the Company’s Current Report on Form 8-K filed with the SEC on August 17, 2011 an incorporated herein by this reference.

57


SIGNATURES

Pursuant to the requirements of Section 13 and 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  SONO RESOURCES INC.
     
  By: /s/ Peter Wilson
    Peter Wilson
    President, Chief Executive Officer and a director
    Date: November 4, 2011
     
  By: /s/ William D. Thomas
    William D. Thomas
    Chief Financial Officer Secretary, Treasurer, and a director  
    Date: November 4, 2011

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date
     
     
/s/ Peter Wilson President, Chief Executive Officer and a director November 4, 2011
Peter Wilson    
     
     
/s/ William D. Thomas Chief Financial Officer, Secretary, Treasurer, and a director November 4, 2011
William D. Thomas    
     
     
/s/ Paul Lindsay Director November 4, 2011
Paul Lindsay